Shaheen Helps Introduce Legislation to Encourage Capital Investments in Rural Businesses
(Washington, DC) – Today, U.S. Senator Jeanne Shaheen (D-NH a senior member of the Senate Small Business and Entrepreneurship Committee (SBC), joined Senators John Thune (R-SD) and Deb Fischer (R-NE) in introducing the Rural Capital Access Act. This bipartisan legislation would incentivize additional capital investments in rural America by improving the Small Business Investment Company’s (SBIC’s) ability to invest in rural businesses and encouraging greater participation in the Rural Business Investment Company (RBIC) program.
“Our rural businesses and entrepreneurs in New Hampshire are the backbone of our local economy, supplying jobs and spurring economic growth, but they often are denied access to venture capital,” said Shaheen. “Rural businesses deserve every support possible to help them rebound, which is why this bipartisan legislation would increase coordination between the Small Business Administration and U.S. Department of Agriculture and make more funds available to invest in rural small businesses. I’m committed to working across the aisle to level the playing field for rural businesses and ensure they aren’t left behind as we build back from the pandemic.”
The Rural Capital Access Act would:
- Provide SBICs with access to additional federally-backed leverage – leverage that is exempt from the $175 million statutory cap – for investments made to qualifying small businesses located in rural areas.
- Allow the Small Business Administration (SBA), in consultation with U.S. Department of Agriculture (USDA), to extend to RBICs federally-backed leverage intended for SBICs that would otherwise go unused, as appropriate, to improve participation in the RBIC program.
- Establish an interagency working group between the SBA, USDA, and industry stakeholders to improve coordination in administering the vastly similar SBIC and RBIC programs, as well as develop recommendations to further improve access to capital and investment in rural areas through these programs, which would include recommendations to increase the number of licensees.
The SBIC program was established in 1958 to provide investment capital to small businesses across the nation. There are currently approximately 300 licensed SBICs in operation today, and the SBA is authorized to provide up to $4 billion in federally-backed leverage each fiscal year to these SBICs to help supplement their investments in small businesses. However, the SBA does not generally provide up to this statutory cap.
The RBIC program was created by the 2002 Farm Bill to specifically help small businesses located in rural areas access investment capital. However, RBICs do not currently have access to federally-backed leverage and, as a result, there are very few licensed RBICs currently in operation.
Senator Shaheen is a steadfast advocate for New Hampshire’s small businesses, especially during the pandemic, and is a member of the bipartisan, bicameral group of lawmakers that has steered negotiations of COVID-19 relief. The COVID-19 relief bill signed into law in December contained Shaheen-negotiated legislation that provided urgently needed assistance to American students, families, businesses, workers and health care providers impacted by the public health and economic crises. Senator Shaheen had a similar leadership role as a negotiator for the Coronavirus Aid, Relief and Economic Security (CARES) Act, which was signed into law last March and secured New Hampshire an initial $1.25 billion to assist with COVID-19 response efforts. Shaheen helped lead discussions on provisions in the CARES to assist small businesses and established the Paycheck Protection Program and expanded the Economic Injury Disaster Loan Program. Both of these programs have been lifelines for businesses throughout New Hampshire and the country.