McMorris Rodgers introduces bill to boost small business investment in underserved regions

Legislation introduced by U.S. Rep. Cathy McMorris Rodgers (R-WA) on Tuesday aims to foster investment in small businesses by promoting the formation of Small Business Investment Companies (SBICs) in underserved regions across the country.

Established under the Small Business Investment Act of 1958, SBICs are privately owned investment companies that are backed by the Small Business Administration (SBA). SBICs offer small businesses looking to finance equity or debt an alternative to venture capital firms.

McMorris Rodgers introduced the bicameral Spurring Business in Communities Act with U.S. Sen. Marco Rubio (R-FL) to help expand the footprint of SBICs in regions that are underserved.

“Small businesses are the backbone of our economy,” McMorris Rodgers said, noting they provide 55 percent of jobs and account for 1.3 million employees in Washington state.

“SBICs serve an important function in providing capital and support to these small businesses, but there are currently none here in Washington state,” she said. “Instead, SBICs are primarily located in large urban and finance centers of the U.S., which only further concentrates lending and investment activity. This legislation will change that by easing the process for SBICs to form in our state, invest in people in our community, grow our local economy and create jobs.”

Under the bill, SBIC applicants in under-licensed states would be exempt from full capital requirements. Also, first priority would be given to SBIC applicants in under-licensed and under-financed states, and the SBA would be required to report to Congress annually on its efforts to expand the geographic reach of SBICs.

“SBICs have an extraordinary record of empowering small businesses to grow and create jobs,” said Brett Palmer, the president of the Small Business Investor Alliance, which represents SBICs nationwide. “We applaud Sen. Rubio and Rep. McMorris Rodgers for helping SBICs bring prosperity and hope to small businesses in every community in the country.”

Rubio said he wanted investors to be able to stay in local economies rather than being thrust into jobs on Wall Street and Silicon Valley.

“Our bill will help reduce America’s investor gap by removing regionally biased obstacles investors face when applying to become a licensed Small Business Investment Company,” Rubio added.