Administrator Guzman Advances New Small Business Investment Company Reforms to Expand Access, Strengthen and Diversify SBA’s Public-Private Investment Partnership Program

Washington, Oct. 18, 2022 (GLOBE NEWSWIRE) -- Today, Administrator Isabella Casillas Guzman, head of the U.S. Small Business Administration (SBA) and the voice in President Biden’s Cabinet for America’s 33 million small businesses, announced the Federal Register publication of SBA-proposed reforms to the Small Business Investment Company (“SBIC”) program designed to reduce financial barriers and increase access and diversity in the U.S. small business investment ecosystem.

“SBA’s SBIC program has helped generations of entrepreneurs bridge capital gaps to build and scale resilient businesses. Despite the program’s impact, we still see underinvestment in communities across America, and the Biden-Harris Administration is committed to filling those capital gaps,” said Administrator Guzman. “Our proposed reforms to the SBIC program aim to diversify our SBIC network and portfolio, and incentivize patient capital to support critical industries as we build a better America. I look forward to working with our private investment partners and receiving important feedback to make this vital program even stronger.”

The proposed rule, SBIC Investment Diversification and Growth, seeks to address structural aspects of the SBIC program which have historically limited the flow of SBIC regulatory capital to small businesses and startups not adequately served by private investors alone.

The proposed reforms published in the Federal Registry include:

  • Reduce barriers to SBIC program participation for new private fund managers and private funds focused on equity and longer-term debt investments in small businesses and startups, especially those in underserved communities and geographies, capital-intensive industries, and technologies critical to national security.

  • Establish an alternative borrowing structure to the traditional Debenture SBIC. This alternative is constructed to align with the cash flow patterns of equity-oriented investment funds and longer-duration strategies.

SBICs are private market investment funds that are licensed as “SBICs” and regulated by SBA. SBICs invest or lend private capital, plus funds borrowed with an SBA guarantee, to make equity and/or debt investments in small businesses and startups. This past year, 299 SBICs invested in over 1,500 companies, which created and sustained over 103,000 U.S. jobs. Such investments are funded by an SBIC program portfolio of over $37 billion in committed and invested capital focused exclusively on small businesses and startups across the United States.

“The SBIC Program was established in 1958 in response to a report published by the Federal Reserve Board acknowledging the important role of small businesses and startups in our country’s economic vitality and a lack of adequate sources of private equity and long-term loans to support the creation and growth of such businesses. SBA’s proposed rulemaking presents an opportunity for the Agency to evolve how we fulfill this mission by strengthening, expanding, and diversifying the reach and impact of the SBIC program. We look forward to hearing from industry as we work to advance a shared mission of solving our nation’s access to capital challenges,” said Associate Administrator for Investment & Innovation Bailey DeVries.

The proposed rule was placed on public inspection and made available in the Federal Register on Oct. 19, 2022. Comments are due Dec. 19, 2022, and proposed reforms are planned to take effect with a final rule to be published in the coming new year.


About the U.S. Small Business Administration

The U.S. Small Business Administration helps power the American dream of business ownership. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit


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