Under current law, the Small Business Administration (SBA) operates a program that provides loan guarantees to Small Business Investment Companies (SBICs) that make investments in qualifying small businesses. The amount of debt the SBA is authorized to guarantee for any SBIC is capped at $150 million. SBICs are required to pay various fees that are sufficient to offset the program’s estimated subsidy cost, that is, the estimated long-term cost to the government of a loan guarantee, calculated on a net-present-value basis. S. 2527 would raise the amount of debt that the SBA can guarantee for a SBIC to $175 million.
