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Investing in Main Street Act of 2021

Floor Speech

By: Judy Chu
By: Judy Chu
Date: Nov. 2, 2021
Location: Washington, DC

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Ms. CHU. Mr. Speaker, I rise in strong support of H.R. 4256, the Investing in Main Street Act, which would make a simple, commonsense change to small business investing laws to ensure that SBA-certified Small Business Investment Companies, or SBICs, can take full advantage of capital available from banks and Federal savings associations.

Even though banking rules allow financial institutions to invest up to 15 percent of their capital and surplus in SBICs, small business investing rules cap these same investments far lower, at just 5 percent of capital and surplus. The Investing in Main Street Act amends this outdated law to ensure that banks can invest the full 15 percent in SBICs, a simple change that will dramatically increase the amount of investment capital available to our country's small businesses.

By raising this cap, this legislation will deliver more investments and more financing to our small businesses for whom even small investments can mean so much. Already, SBICs have helped companies like Tesla, Apple, and Intel get off the ground back when they were just starting out.

SBICs fill a gap in the investment ecosystem and level the playing field by providing equity investments and financing opportunities to the smallest businesses which face the highest barriers to secure investments from traditional, private investors.

The nearly 300 certified SBICs in operation today have invested or committed $32 billion in small businesses nationwide. Last year, in my State of California alone, SBICs made nearly 300 financings, totaling over $670 million. By raising the investment cap from 5 to 15 percent, we could potentially triple those investments in the years to come. That growth will be so important as our country continues to recover and rebound from the COVID pandemic.

America's small businesses have endured one of the most challenging periods in our country's history, and now is the time to help them rebuild and grow.

I want to thank Representative Garbarino for his partnership on this legislation, and Chairwoman Velazquez and Ranking Member Luetkemeyer for their strong support. I urge a ``yes'' vote on this bill.

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