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.