Mr. Speaker, I rise in support of the bill before us today, H.R. 400, the Investing in Main Street Act of 2023.
The SBA's Small Business Investment Company program is a multi- billion-dollar investment program designed to bridge the gap between a small business owner's need for capital and traditional sources of financing. It achieves this purpose by partnering private and public investments in early-stage startup businesses.
It also gives America's small, high-growth companies an opportunity to fund and grow their innovative ideas and create jobs.
The success of this program can be seen with companies like Apple, Intel, and FedEx, which all received early stage financing from the SBICs.
In fiscal year 2021, the combined private capital and SBA-backed funds totaled $34 billion, which was the highest in program history, and helped support more than 126,000 jobs. The number of financings to women-owned, minority-owned, and veteran-owned small businesses increased by 36 percent.
Yet, we can do more to ensure the program continues to meet demand.
The Investing in Main Street Act, introduced by my colleagues, Representatives Chu and Garbarino, will strengthen and grow the SBIC program by allowing banks and Federal savings associations to invest up to 15 percent of their capital and surplus into SBICs.
This change brings the Small Business Investment Act of 1958 in line with the Office of the Comptroller of the Currency's national bank charter percentage requirements. It will increase the investment capital available to SBICs and allow them to invest more in small businesses.
I applaud Representatives Chu and Garbarino's continued work on this issue and this bill, and I ask all my colleagues to support this bill.
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Ms. VELAZQUEZ. Chu).
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Ms. VELAZQUEZ. Jackson Lee).
Ms. JACKSON LEE. Mr. Speaker, I thank the ranking member of the Small Business Committee for astute work on issues dealing with small businesses; Mr. Williams, a colleague from Texas; and the bipartisan sponsors of this legislation.
I have always said that small businesses are the backbone of the economic engine of America, so I rise in support of H.R. 400, the Investing in Main Street Act of 2023, for the wiseness of providing more investment in small businesses.
As a strong supporter of small businesses, I believe that this bill will improve the livelihood of many small businesses that have continuously been impacted by the COVID-19 pandemic. The bill is designed to release more capital investment into small businesses in America. If my colleagues have interacted with the small business community, that is one of the number one issues that they raise consistently.
The bill would allow certain banks and savings associations to invest more into small business investment companies by increasing the statutory cap from 5 percent to 15 percent--I can't even imagine the number 5 percent--and the growing amount of small businesses and the ones that really stayed the course in desperate times, which was COVID- 19.
According to the U.S. Bureau of Labor Statistics, 2020 had the highest total number of applications for new businesses by far compared to all other years. From 2019 to 2021, there was a 20 percent increase in the number of small businesses. The Kauffman Foundation says that the highest amount was among Blacks, Latinos, and immigrants.
People know that small businesses allow them to create jobs in their own neighborhoods and to build future conglomerates, but obviously, small businesses reported negative impacts due to COVID.
It is important for this bill to become law immediately. Pass it in the Senate and ensure that we have the opportunity to keep our small businesses from closing. When small businesses have ideas, we need to be able to give them the investment to focus on.
The Biden-Harris administration has laid the foundation and has helped create the conditions for businesses and job creation. We have had increasing job creation every month, but we do know that cities like New Orleans and Honolulu have seen the highest rate of small business closures. Other cities are right behind.
The fact that we can have a Small Business Administration that reforms and works with the Paycheck Protection Program, to improve that, if we had another circumstance like that that held up some of our small businesses, this investment is going to be a lifeline.
I am delighted to rise to support this legislation because, again, as I opened my remarks, small businesses are the economic engine of America and give women, minorities, and others the opportunity to build an economic engine.
Mr. Speaker, I rise in support of H.R. 400, the Investing in Main Street Act of 2023, to amend the Small Business Investment Act of 1958 to increase the amount that may be invested in small business investment companies.
As a strong supporter of small businesses, I believe that this bill will improve the livelihood of many small businesses that have continuously been impacted by the COVID-19 pandemic.
This bill is designed to release more capital investment into small businesses in America.
The bill would allow certain banks and savings associations to invest more into small business investment companies by increasing the statutory cap from 5 percent to 15 percent.
During the COVID-19 pandemic, the United States saw a significant rise in small businesses.
According to the U.S. Bureau of Labor Statistics, 2020 had the highest total number of applications for new businesses by far compared to all years that data was available.
From 2019 to 2021, there was a 20 percent increase in the number of small businesses created. That is more than double the average growth rate year to year.
According to the Kauffman Foundation, the increase in the rate of entrepreneurship during the pandemic was highest amongst Blacks, Latinos, and immigrants.
Even though there has been a significant rise in the number of small businesses during the pandemic, many businesses report negative impacts due to COVID.
In April 2020, the U.S. Census Bureau launched the Small Business Pulse Survey to produce data in real-time on the challenges small businesses were facing due to the pandemic.
When the first survey was collected in April of 2020, 90 percent of businesses surveyed stated that the pandemic had a negative effect on business.
When the last survey was collected in April of 2022, 70 percent of businesses surveyed stated that the pandemic had a negative effect on business.
Almost three years into the pandemic, small businesses are still struggling with getting back on their feet.
Cities such as New Orleans and Honolulu had some of the highest rates of small business closures in the country because their economies are largely built around serving visitors.
In large cities like San Francisco and Austin, the food industry was largely impacted because those who would typically eat out on their lunch break were now working from home.
The time for small business recovery is now.
The Biden-Harris administration has laid the foundation and has helped create the conditions for business and job creation.
With the evolution of almost 5.4 million small businesses in 2021, we must work to maintain and support these growing businesses.
The Biden-Harris administration partnered with the Small Business Administration (SBA) to reform the Paycheck Protection Program (PPP). The policy changes targeted small business and companies that were left out of previous relief efforts.
The data shows that these PPP policy changes provided more support in minority communities than the rounds under the previous administration.
The Small Business Relief under the American Rescue Plan included targeted grant relief and tax credits for small businesses hit by the pandemic.
The Small Business Relief produced immediate relief to more than 600,000 of the hardest hit small businesses.
The Biden-Harris administration was able to provide more than 6 million small businesses with $450 billion in emergency relief via the Small Business Administration.
Investing more in our small businesses has had a profound impact on the job market in the United States.
In the first three quarters of 2021, small businesses with 50 employees or less created almost 2 million jobs in the United States, the fastest start to small business job growth in any year on record.
Investing in main street should continue to be a priority for Congress.
Through this bipartisan bill, certain financial institutions would have the ability to invest more into small business investment companies by raising the statutory cap.
I urge my colleagues to join me and support this important legislation that will expand access to capital, increase the number of small businesses, and create jobs at home.
We must show the American public that improving the economy is a priority in Congress. This bill is a good first step at doing so.
Mr. Speaker, the SBIC program fills the gap between the availability of venture and private equity capital and the needs of small businesses in startup and growth situations.
For decades, this program has channeled capital to leading-edge, high-growth companies. Without it, some of the Nation's most successful corporations would not be the companies they are today.
H.R. 400 raises the investment cap for banks and Federal savings associations from 5 percent to 15 percent. This will lead to significant small business investment by SBICs, which will result in economic growth in our local communities and job creation.
I applaud Ms. Chu and Mr. Garbarino for their bipartisan work on this bill.
Mr. Speaker, I encourage all of my colleagues to vote ``yes,'' and I yield back the balance of my time.
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