A bipartisan bill from U.S. Rep. Steve Stivers (R-OH) offering certain investors more capital to help grow America’s small and medium-sized businesses has become law as part of the $1.3 trillion omnibus government funding bill signed by the president on March 23.
The Small Business Credit Availability Act, H.R. 4267, was included as an amendment to the Consolidated Appropriations Act, H.R. 1625, which the U.S. House of Representatives and U.S. Senate passed last week before presenting the bill to President Donald Trump on Friday for his signature.
Among several provisions, H.R. 4267 would amend the Investment Company Act of 1940 to expand capital for business development companies (BDCs), which are organizations that invest in and help small and medium-sized companies grow during the initial stages of their development, according to Investopedia. Many BDCs are set up like closed-end investment funds and more than half of them are publicly traded companies.
“Unfortunately, in recent years, we have seen banks cut back on lending to small and mid-sized businesses, making BDCs an even more important resource to our job creators,” Rep. Stivers said. “I am proud we were able to pass this legislation to make it easier for BDCs to provide financing to these businesses so they can continue to create jobs in our communities.”
BDCs were established by Congress in the 1970s to remedy a drop-off in bank lending to small businesses and they are required to invest at least 70 percent of their assets into public or private companies valued at less than $250 million, according to information provided by Stivers’ office. The regulatory policies governing BDCs have remained little changed for more than 30 years, the congressman’s staff said.
Rep. Stivers was joined by U.S. Reps. Tom Emmer (R-MN), Randy Hultgren (R-IL), and Brad Sherman (D-CA) in introducing H.R. 4267 on Nov. 7, 2017. U.S. Sens. Dean Heller (R-NV) and Joe Manchin (D-WV) on Jan. 18 introduced the companion bill, S. 2324, in the Senate, with U.S. Sens. Thom Tillis (R-NC) and Mike Rounds (R-SD) as among the bill’s cosponsors.