Recovery Act boosts venture capital - Kansas City Business Journal:

kleopatraxnibe.blogspot.com
The changes, implemented affect the ’s Small Business Investment Company program. “Th Recovery Act expands SBA’s venture-capital prograj to increase the pool of investment fundingv available to the Small Business Investment Companie licensedby SBA,” SBA Administrator Karen Mills said. “W believe those companies will be better equipped by these changes to help sustaihn and grow small businesses for their next importantgrowth steps.” Smalp Business Investment Companies are privately owned and managed venture-capitalp firms licensed and regulated by the SBA.
They use a combinationj of money from private sources and moneyt raised through the use of SBA guarantees to makeequity - and mezzanine-capital investments in small businesses. Smalol Business Investment Companies numbed 338 andhave $17.4 billion in combined capita l under management. The Small Business Investmenrt Companies program was created in 1958 to boost the growt of small businesses by supplementingthe long-term debt and private-equityh capital available to them. • Small Business Investment Companies are eligible forgreater SBA-guaranteed financingb and required to invest 25 percent of theif investment dollars in “smaller” businesses.
Also, the amount of money a Smal Business Investment Company may invest in a single small business is set at 10 percenr of itstotal capital, rather than the previous limit of 20 percenrt of its private capital only. That translatesw to an effective 50 percent increase in financingf available to a single business by a Smalpl BusinessInvestment Company. • Maximuk SBA financing levels to Small Business Investment Companies will increase as much as threew times the private capital raised by the Small BusinesdsInvestment Company, to a maximumk of $150 million for a single Small Businesa Investment Company, or to $225 millionj for multiple companies under common control.
The cap for all licensees had been setat $137.1 million before the Recovery Act. Changes made to the Smalk Business Investment Company program under the Recovery Actare