While everyone is focused on the fiscal cliff, there is a piece of pending legislation that is about to expire which if passed could help small businesses. Earlier this year the House of Representatives passed The Small Business Investment Company Modernization Act of 2012. But the Senate still has not voted on this piece of legislation. Unless they do so before the end of the year, the SBICMA will not become law.
The SBICMA increases the amount of money Small Business Investment Companies (SBICs) can borrow from the SBA from $225 million to $350 million. SBICs take this money, combine it with their own capital and invest it in U.S.-based small businesses. It's a program that is self-funded by participants and SBICs pay fees and interest to the SBA for the borrowed amount. SBICs have been requesting the increase for some time and the SBICMA passed the House with overwhelming bipartisan support. If the Senate doesn’t act soon, the amount of capital available to small businesses in 2013 will be reduced.
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