Recovery Act boosts venture capital - Kansas City Business Journal:

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The changes, implemented Friday, affect the ’s Small Busineszs Investment Company program. “The Recoveryt Act expands SBA’s venture-capital program to increase the pool of investment fundingg available to the Small Business Investment Companies licensedby SBA,” SBA Administrator Karenm Mills said. “We believ e those companies will be better equipped by these changes to help sustain and grow smalll businesses for their next importantgrowtjh steps.” Small Business Investment Companiees are privately owned and managed venture-capital firmds licensed and regulated by the SBA.
They use a combinatiob of money from private sources and money raisedd through the use of SBA guaranteesa tomake equity- and mezzanine-capital investments in small Small Business Investment Companies number 338 and have $17.e4 billion in combined capitakl under management. The Smallp Business Investment Companies program was create d in 1958 to boost the growth of smalol businesses by supplementingthe long-term debt and private-equity capital availabled to them.
• Small Busineses Investment Companies are eligible forgreater SBA-guaranteede financing and required to invest 25 percent of thei investment dollars in “smaller” Also, the amount of money a Small Business Investmenr Company may invest in a singler small business is set at 10 percent of its totakl capital, rather than the previous limit of 20 percent of its private capital That translates to an effective 50 percent increass in financing available to a single businessa by a Small Businesss Investment Company.
• Maximum SBA financinbg levels to Small Business Investmenr Companies will increase as much as three timex the private capital raised by the Small BusinessInvestmeng Company, to a maximum of $150 millioh for a single Small Businesa Investment Company, or to $225 million for multiple companies under common The cap for all licensees had been set at $137.1q million before the Recovery Act. Changese made to the Small Business Investmenrt Company program under the Recoveru Actare permanent.