WASHINGTON, DC – Today, Congressman Dave Joyce (OH-14) announced he has introduced H.R. 5521, the Rural Capital Access Act, alongside Congressman Jared Golden (ME-02). This bipartisan legislation would incentivize capital investments in rural communities by expanding the ability of the Small Business Investment Companies (SBIC) to invest in rural small businesses and improving participation in the Rural Business Investment Company (RBIC) program. Senators John Thune (SD), Jeanne Shaheen (NH) and Deb Fischer (NB) have introduced the legislation in the Senate.
“Small businesses are the lifeline of the Buckeye economy, employing more than 2.2 million Ohioans,” said Congressman Joyce. “Unfortunately, small businesses located in rural areas of our state face unique challenges in accessing capital. It’s critical that we do everything possible to ensure these businesses don’t get left behind as we work to recover from the pandemic. My bill will help improve access to investment capital for rural businesses, ensuring that each and every Main Street can offer opportunities for new businesses to grow regardless of where they are located.
“Small businesses are the key to rebuilding the economy and getting people back to work in rural communities like the ones I represent,” said Congressman Golden. “The Rural Capital Access Act will help rural small businesses get the capital they need to open or expand, hire more workers, and contribute to their local economy. I’m proud to work across the aisle with Congressman Joyce to make progress for American small businesses.”
“In rural areas where small businesses play a particularly vital role in job creation, it is critical to address the rural-urban gap in access to growth capital,” said Small Business Investor Alliance President Brett Palmer. “Rural businesses need patient, more flexible capital to help them grow and support their communities. We applaud Rep. Joyce and Rep. Golden for their leadership on this issue and for drafting a bill that will facilitate more investment in rural small businesses.”
The SBIC program was established in 1958 to provide investment capital to small businesses across the nation. While the SBA is authorized to provide up to $4 billion in federally backed leverage each fiscal year to help SBICs supplement their investments in small businesses, the SBA does not generally provide up to this statutory cap. The RBIC program was created in 2002 to specifically help small businesses in rural areas access investment capital. However, RBICs do not currently have access to federally backed leverage which has resulted in the operation of very few licensed RBICs.
Specifically, Joyce’s legislation would:
- Allow SBICs to receive an additional $25 million per fiscal year in federally backed leverage, ensuring they are able to take on SBA-backed debt up to $200 million so long as that additional debt is used to invest in rural businesses.
- Improve participation in the RBIC program by allowing the SBA, in consultation with U.S. Department of Agriculture (USDA), to provide RBICs access to unused federally backed leverage authorized for SBICs. Last year, the SBA backed roughly $1.8 billion in SBIC debt, falling $2 billion short of the $4 billion statutory cap.)
- Establish an interagency working group between the SBA, USDA, and industry stakeholders to improve coordination in administering the SBIC and RBIC programs, as well as develop recommendations to further improve access to capital and investment in rural areas through these programs.
You can read the full text of this bipartisan legislation here.