Today, President Obama signed the Jumpstart Our Business Startups Act (JOBS), making it easier for small businesses and entrepreneurs to obtain much needed access to capital. This new law creates an enhanced environment for growth.
Last year, senior SBA officials traveled around the country listening to high-growth entrepreneurs. We heard your concerns and learned about the barriers to expansion particularly for high-growth industries and the need for a simplified process-one that any business could use to grow and create jobs. We know that small businesses have struggled to find access to capital in this environment, not just in lending, but in equity financing as well, and in all stages of the company’s development.
The SBA has already helped thousands of high-growth businesses. The Small Business Investment Company (SBIC) program - a great source of equity capital for high-growth companies - licensed twice the number of funds in half the time in FY 2011 compared to the average from FY 2006 through FY 2009. In FY 2011, the SBIC Program provided a 50-year record high of $1.6 billion in financing for small businesses. SBA also revitalized the Small Business Innovation Research (SBIR) program and helped agencies distribute $2.5 billion in funding to qualified small businesses.
We are also constantly reevaluating other parts of the market to ensure that our businesses are successful- from the earliest stages of growth to their ultimate peak where they are ready to make their initial public offering (IPO) for investment on the public markets.
The JOBS Act benefits both Main Street small businesses as well high-growth entrepreneurs. Before the JOBS Act, a coffee shop in Akron that wanted to franchise itself would be limited to investors that are “accredited” according to the SEC or angel investors, slowing the process for growth significantly and giving an advantage to wealthier investors and the small businesses they have relationships with. Recognizing the difficulty of finding streams of capital at the earliest stages of expansion, this measure creates more opportunities for small businesses to raise money from customers and investors in their communities.
The JOBS Act also addresses some of the barriers for small businesses ready to make their IPO. These changes to the Securities Exchange Commission (SEC) rules include measures to streamline the process- making it easier to reduce the cost and complexity. This change is something small businesses, not just the big guys, can benefit from.
The bipartisan bill signed today by President Obama is yet another step toward the Nation’s economic recovery. The Obama Administration is committed to ensuring growth for small business- the engines of job creation in the American economy. By reducing burdens for our high-growth businesses and expanding opportunities for more Americans to invest locally, the JOBS Act empowers our small businesses to do what they do best: grow and create jobs.