1) Nov 14 -- The SBA is holding a webinar to update the public on proposed regulations to the Small Business Investment Company (SBIC) program contained in the proposed rule titled Small Business Investment Company Investment Diversification and Growth. The public webinar will be held on Monday, 11/28/2022, from 4 to 5 p.m.
https://www.federalregister.gov/d/2022-24714
2) Oct 19 -- The U.S. Small Business Administration (“SBA” or “Agency”) is proposing to revise the regulations for the Small Business Investment Company (“SBIC”) program to significantly reduce barriers to program participation for new SBIC fund managers and funds investing in underserved communities and geographies, capital intensive investments, and technologies critical to national security and economic development. This proposed rule introduces an additional type of SBIC (“Accrual SBICs”) to increase program investment diversification and patient capital financing for small businesses and modernize rules to lower financial barriers to program participation. This proposed rule will help SBA implement the Executive Order (“E.O.”), Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, by reducing financial and administrative barriers to participate in the SBIC program and modernizing the program's license offerings to align with a more diversified set of private funds investing in underserved small businesses. The proposed rule also incorporates the statutory requirements of the Spurring Business in Communities Act of 2017, which was enacted on December 19, 2018. Comments must be received on or before December 19, 2022.
The mission of the Small Business Investment Company (SBIC) program is to enhance small business access to capital by stimulating and supplementing “the flow of private equity capital and long-term loan funds which small-business concerns need for the sound financing of their business operations and for their growth, expansion, and modernization, and which are not available in adequate supply.” SBA carries out this mission by licensing and monitoring privately owned and managed investment funds that raise capital from private investors (“Private Capital”) and issue SBA-guaranteed Debentures (“Debentures”) to make private long-term equity and debt investments = into qualifying small businesses. . . .
SBA is proposing changes to 13 CFR part 107 to reduce barriers to program participation for new SBIC fund managers and funds investing in (i) underserved communities and geographies, (ii) capital intensive investments, and (iii) technologies critical to national security and economic development. This proposed rule will help SBA implement Executive Order (“E.O.”) 13985, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government by reducing financial and administrative barriers to participation in the SBIC program and modernizing the program's license offerings to align with a more diversified set of new funds investing in underserved small businesses. SBA notes that newly managed funds are consistently among top performers based on net total value to paid-in capital as of June 30, 2019, data from Cambridge Associates, LLC.
One of the key proposed changes is the implementation of a new type of Debenture (“Accrual Debenture”) designed to align with the cash flows of long-term, equity-oriented funds (“Accrual SBICs”). . . .
To further promote E.O. 13985, SBA is proposing to revise the existing prohibited investment requirements under § 107.720 that permit SBICs to invest in relenders or reinvestors under specific circumstances. . . .
SBA is also proposing to modernize the licensing, operations, and examinations rules to lower cost and administrative barriers faced by new funds applying to the SBIC program. . . .
FRN:
https://www.federalregister.gov/d/2022-22340 [23 pages]
