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On The Floor  »  Small Business Investment Expansion

Small Business Investment Expansion

On September 27, 2007, the House passed the Small Business Investment Expansion Act of 2007, H.R. 3567, which will help business owners, particularly veterans and women, to obtain investment capital to start or grow their small businesses.

In order to expand, small businesses must purchase additional capital assets, which often include equipment, machinery, real estate, or human resources. Given the high cost of these assets, however, small businesses are generally dependent upon financing, which typically comes in the form of venture capital and angel investments (investments from high income individuals who support start-up companies). Unfortunately, despite the Small Business Administration’s investment programs, there are more than $60 billion in unmet capital needs for small businesses each year.

The Small Business Investment Expansion Act addresses the current shortfall in capital investment by revamping the SBA’s Small Business Investment Company (SBIC) and the New Markets Venture Capital (NMVC) programs. Both are public-private partnerships designed to aid small firms – in particular those owned by veterans and women – in acquiring venture capital. The bill also creates a new Office of Angel Investment to build the first-ever nationwide network of angel groups and enhance awareness about available investment opportunities. Angel investors account for more than 51,000 start-ups each year, and are rapidly becoming a common way for startups to obtain capital. Additionally, this legislation would ensure firms that receive venture capital are able to maintain their small business classification, removing current disincentives to seeking this kind of financing.

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Make it in America is a new legislative initiative from House Democrats to revitalize manufacturing in America, create new good-paying jobs, and make our nation more secure. This effort builds on House Democrats' actions since the start of the Bush Recession to create jobs and lay a strong new foundation for our economy.