The Small Business Administration (SBA) has implemented new rules that support the Biden-Harris Administration’s economic and equity priorities. Called the Growth Final Rule SBA Administrator Isabella Casilla Guzman said that the regulatory and policy reforms will increase access to private equity and debt capital for:
• Underserved small businesses and startups,
• Undercapitalized critical technologies,
• Diverse and emerging fund managers, and
• Innovation investment. Starting 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.
Critically, the regulatory and policy reforms are designed to reduce the financial burden for new program applicants and provide a more streamlined application experience.
Since 1958, the SBA has licensed and regulated private market investment funds as “SBICs.” SBICs invest equity or lend private capital, plus funds borrowed with an SBA guarantee, to make equity and/or debt investments in small businesses and startups. Today, 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 over 103,000 U.S. jobs. ?