The "Investing in All of America Act of 2025" modifies the Small Business Investment Act to refine leverage calculations for SBICs, prioritizing investments in critical technology, small manufacturing, and underserved areas while adjusting maximum leverage exclusions.
Daniel Meuser
Representative
PA-9
The "Investing in All of America Act of 2025" amends the Small Business Investment Act of 1958, modifying how the Small Business Administration calculates leverage for small business investment companies (SBICs). It lowers the maximum leverage exclusion from $300 million to $200 million, expands eligibility to include small businesses in critical technology and manufacturing, and limits the exclusion amount for a company. The bill also requires annual adjustments to the dollar amounts based on the Consumer Price Index.
New Rules for Small Business Investment: 'Investing in All of America Act of 2025' Changes Leverage Limits
The "Investing in All of America Act of 2025" tweaks the rules for Small Business Investment Companies (SBICs) – basically, firms that invest in small businesses. The core change? It adjusts how much these investment companies can borrow to fund their investments, a concept called "leverage."
Tightening the Reins
The bill lowers the maximum amount of leverage an SBIC can exclude from certain calculations, dropping it from $300 million to $200 million (SEC. 2). It also clarifies that government funds (federal, state, or local) generally can't be used to boost this leverage, with exceptions for things like pension funds or college endowments. Think of it like this: Uncle Sam won't help you borrow more money to invest, unless it's from specific, generally stable sources. This change aims to cut down on riskier investments, but might mean a tighter credit for some businesses. The aggregate amount excluded for any single company is also capped – it's now the lower of 50% of the company's private capital or $125,000,000. So, even if a company has a ton of private investment, there's still a hard limit on how much leverage the SBIC can get from it.
New Investment Targets
It's not all restrictions, though. The bill expands the types of small businesses that qualify for this leverage exclusion. It's not just about businesses in low-income or rural areas anymore. Now, small businesses in "critical technology areas" and small manufacturers also get a boost (SEC. 2). This could be a win for tech startups and small-scale manufacturing operations, making it easier for them to attract investment. If you are running a small AI startup or specialized manufacturing, this bill is made for you.
Keeping Up with Inflation
Finally, the bill mandates that the $200 million and $125 million figures get adjusted annually based on the Consumer Price Index (CPI) (SEC. 2). This means these amounts will automatically increase over time to keep pace with inflation. However, there's an exception for SBICs that issue "accrual debentures" – they're exempt from this annual adjustment. This provision is designed to maintain the real value of these leverage limits over time, but the exemption for accrual debentures could create a slight difference in treatment between different types of SBICs.