Small Business Investment Company Modernization Act of 2012

Floor Speech

BREAK IN TRANSCRIPT

Ms. VELÁZQUEZ. I want to take this opportunity to thank the gentleman from Ohio for his work on this issue.

Since 1958, the SBIC program has been an integral part of SBA's mission to provide small businesses with capital and create jobs. To date, the program has invested approximately $63 billion in more than 110,000 U.S. companies. In fact, some of the Nation's most successful corporations, including Apple, FedEx, and Costco, received early-stage financing from SBICs. The key to the program's success is leveraging Federal funds to increase the amount of private capital invested in promising start-up companies.

Access to capital is the lifeblood of every small business. After the 2008 financial crisis froze traditional credit markets, many firms sought out alternative providers of financing, particularly SBICs. Demand quickly outpaced the program's capacity, requiring a significant increase in the leverage caps to keep up. Under the American Recovery and Reinvestment Act, the leverage cap on an SBIC family of funds nearly doubled to $225 million.

As a result, the program experienced unprecedented growth, setting a record in 2012 with over $2.5 billion in equity financings made, an 85 percent increase from 2010. This success has pushed many SBIC licensees against the new leverage caps, reducing the flow of capital to worthy small businesses.

As you know, the goal of the SBIC program is to fill the gap between the availability of venture capital and the needs of small businesses in start-up and growth situations. Although this bill only addresses the needs of some in the SBIC community, it will still get additional equity capital flowing. As the economy continues its recovery, every dollar invested in small businesses will be important.

I urge my colleagues to support this bill, and I reserve the balance of my time.

BREAK IN TRANSCRIPT

Source