SBA issues new rule related to its Small Business Investment Company program
There are two new licenses – the “Accrual SBIC” and the “Reinvestor (Fund-of-Funds) SBIC” – that expand the SBIC program network of private market financing partners and the SBA’s reach to historically underserved small businesses and start-ups.
In a move that national publication Axios described as opening up “billions of loan dollars to venture capital funds,” the U.S. Small Business Administration (SBA) formally adopted new guidelines for the Small Business Investment Company’s (SBIC) Diversification and Growth Final Rule.
Under the new rule which became effective August 17, the SBA will implement regulatory and policy reforms to increase access to private equity and debt capital for:
- Underserved small businesses and start-ups;
- Undercapitalized critical technologies;
- Diverse and emerging fund managers; and
- Innovation investment.
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 start-ups. Critically, the regulatory and policy reforms are designed to reduce the financial burden for new program applicants and provide a more streamlined application experience.
More information can be found in the SBA news release.
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