SBIC Borrowing Limits Jump to $175M, Targeting Rural and Tech Investment

The Investing in All of America Act of 2025 is basically a turbocharger for the Small Business Administration’s (SBA) main investment program, the Small Business Investment Company (SBIC) program. This bill increases the amount of money SBICs can borrow—or leverage—from the government and directs that capital toward specific types of businesses and locations. Specifically, the maximum leverage limit for an individual SBIC is jumping from $175 million to $175 million, and for groups of commonly controlled SBICs, it hits $350 million (SEC. 2). Crucially, these limits will now be adjusted annually for inflation using the Consumer Price Index (CPI), meaning the ceiling on borrowing will actually keep pace with the real world, a huge change for long-term planning.

More Money, New Mandates

Think of SBICs as private venture capital funds that get government-backed leverage to invest in small businesses. For the average person, this bill means more capital is flowing into the economy, potentially creating more jobs and opportunities. The big change here is where that money is now being encouraged to go. When calculating an SBIC’s outstanding leverage, the bill allows them to exclude certain investments from the total, effectively giving them more room to borrow. These new exclusions target investments in small businesses located in low-income geographic areas, rural areas, or those operating in critical technology areas or as small manufacturers (SEC. 2). This is the government attempting to use the investment system to steer capital away from already saturated markets like Silicon Valley and into places and industries that need it more, like a new manufacturing plant in a small town or a tech startup in a historically underserved neighborhood.

The Fine Print on Funding Sources

If you run an SBIC, the bill also clarifies who can put money into your fund that counts toward your leverage base. They are explicitly adding funds from university-associated foundations, endowments, or trusts to the list of acceptable sources, treating them the same as pension funds (SEC. 2). This is a nice little nod to major academic institutions looking to deploy their massive endowments in this space. However, on the flip side, the bill makes it crystal clear that any money coming directly or indirectly from Federal, State, or local government agencies will not count toward the required capital base needed to secure government leverage, with the exception of those university or pension funds. This provision seems designed to prevent SBICs from double-dipping—using one pot of government money to secure a second, larger pot of government leverage.

The Real-World Impact and the Fuzzy Edges

For a small manufacturer looking to expand production in a rural area, this bill is great news. It makes their business a more attractive target for SBIC investment, as the SBIC gets a leverage benefit for funding them. However, the bill is a little vague on the details. Terms like “critical technology areas” and “small manufacturers” aren't defined in this section, leaving the SBA Administrator to draw those lines. That discretion is powerful; how the SBA defines those terms will determine exactly which businesses get preferential access to this newly expanded pool of capital. While the goal is to drive investment into key areas, the vagueness could lead to debate over who truly qualifies.

Overall, the Investing in All of America Act is a significant modernization of the SBIC program, providing more capital and updating the rules to keep pace with inflation. It’s a clear signal that the government wants to promote investment in specific, often overlooked, sectors and geographies. The higher leverage limits mean more risk is being taken, but the hope is that this risk translates into meaningful economic development in places that haven't seen much of the venture capital action lately.