The SBA will implement regulatory policy reforms to increase access to private equity and debt capital.
This month, the U.S. Small Business Administration’s (SBA’s) Small Business Investment Company (SBIC) Diversification and Growth Rule is in effect.
Under this new Diversification and Growth Rule, the SBA will implement regulatory policy reforms to increases access to private equity and debt capital for: 1) underserved small businesses and startups; 2) undercapitalized critical technologies; 3) diverse and emerging fund managers; and 4) innovation investment.
As of Aug. 17, private market fund managers can apply for SBIC licenses designed for investing in American small businesses and startups with equity-oriented or long-duration strategies. The two new SBIC licenses – the “Accrual SBIC” and the “Reinvestor (Fund-of-Funds) SBIC” – expand the SBIC program network of private market financing partners and the SBA’s reach to historically underserved small businesses and startups.
According to the SBA, the SBIC program is comprised of more than 308 discrete private funds across mezzanine, private credit, buyout, growth, venture, and multi-strategy, which collectively have more than $40 billion in public and private assets under management (AUM). Last year, SBICs invested $8 billion in more than 1,500 companies that created and sustained more than 103,000 U.S. jobs.
Read the full press release on the Diversification and Growth Rule here.