Federal Assistance May Be on the Way in 2014 for Startups and Small Companies

Written by MCJStaff   // March 7, 2014   // 0 Comments

smallbusiness.foxbusiness.com

smallbusiness.foxbusiness.com

 

by Carolyn M. Brown -blackenterprise.com

The small business community is waiting for Congress to finally call a vote on a bill intended to increase the amount of capital available to startups and small companies through a program regulated by the Small Business Administration. The EXCEL (Expanding Access to Capital for Entrepreneurial Leaders) Act, if passed, would amend the Small Business Investment Company (SBIC) program.

EXCEL sets the maximum amount of debt that the SBA can guarantee under the SBIC program at $4 billion per year. That is an increase from $3 billion currently. Supporters believe the increase would encourage more private investment funds as a result.

Further, the bill would raise the maximum amount of debt that the SBA can guarantee for a group of companies participating in the program that are operated together (a “family of funds”) from $225 million to $350 million.

Supporters of the legislation believe that it will attract additional investors and thereby provide startups and other small companies with access to more loans and investment capital. According to a Small Business Committee report, the bill would encourage banks, individual investors, and local municipalities to invest in SBIC Funds.

SBICs, licensed by the SBA, are privately owned and managed investment firms that invest with their own capital and with funds borrowed at favorable rates through the federal government. In fiscal year 2012, the SBIC program provided capital to more than 1,000 small businesses.

EXCEL was first introduced during National Small Business Week in 2012 by U.S. Sen. Mary Landrieu (D-La.). It was developed after the Senate Committee on Small Business and Entrepreneurship held a series of roundtables to discuss how the federal government could assist entrepreneurs and startup companies. The bill was reintroduced in 2013 but is still awaiting debate on the Senate floor.

SmallBizTrends.com reported that Sen. Landrieu touched on the EXCEL Act during the confirmation hearing of Maria Contreras-Sweet as new administrator of the SBA. Landrieu said the bill could have helped up to 40 small businesses and created close to 2,000 jobs immediately if it had passed.

According to SmallBizTrends, the Louisiana senator wanted Contreras-Sweet to affirm her support for the EXCEL Act and other measures that would help small businesses get access to long-term capital. Landrieu is the past chair of the Senate Committee on Small Business and Entrepreneurship. She was recently replaced by Sen. Maria Cantwell of Washington.

EXCEL currently has bipartisan support in Congress but reportedly was held up from passing by a handful of legislators.


Tags:

Congress

SBIC program

Sen. Maria Cantwell

Small Business Administration

small business community

SmallBizTrends

The EXCEL Act

U.S. Sen. Mary Landrieu


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