Summary

Changes how Small Business Investment Companies (SBICs) count certain investments when calculating their maximum leverage. It lets SBICs exclude specified qualifying investments from the leverage calculation up to set dollar caps (only for investments made after this law takes effect) and narrows the definition of “private capital” so that most government-provided funds cannot be treated as private capital when the Administrator reviews leverage requests. The effect is to potentially increase SBICs’ usable leverage capacity for new investments in targeted small businesses, while preventing government-provided funding from being counted as private capital in leverage approvals. The change applies only to investments made after the law’s enactment and includes dollar limits and other eligibility rules for excluded investments.

Key Points

• Permits SBICs to exclude certain qualifying investments from their maximum leverage calculation up to statutory dollar limits.
• Exclusions apply only to investments made after the law takes effect.
• Revises the definition of "private capital" so most government-provided funds cannot be counted as private capital for leverage approval.
• Aims to free up SBIC leverage capacity to encourage new investment into specified small-business categories.
• Imposes dollar caps and eligibility rules — the carve-out is limited and conditional, not unlimited.
• Directly affects SBIC reporting, SBA leverage review process, and small businesses targeted for investment.
• Does not change broader tax, appropriations, or national security law; it is a narrowly targeted regulatory amendment.

Categories & Tags