BDC regulatory modernization
Pennsylvania’s small businesses are critical to the American economy. But, Main Street businesses across Pennsylvania and the rest of the country face barriers when it comes to accessing the capital that will help them grow. Bank loans to these businesses have decreased by 38 percent since 2006, creating a large gap in financing options. Fortunately, business development companies (BDCs) have been able to fill this gap in funding. In fact, BDCs have become the primary source of financial support for Main Street businesses, providing over $87 billion in capital since 1980. Congress took strong steps in the right direction with the Small Business Credit Availability Act and the SEC’s most recent proposed rule amendments but, more must be done to modernize BDC rules. In order to make sure small- and mid-sized businesses can continue accessing this capital, BDC regulations must be updated.
Despite BDC’s importance to Main Street business growth over the past few decades, much of BDC’s regulatory framework under the SEC is stuck in the past. This has slowed BDCs’ ability to make investments and stifled economic growth. We urge Pennsylvania elected officials to continue to support BDC regulatory modernization so BDCs can keep performing their important role for small- and mid-sized business owners while remaining well regulated. It’s time to ensure that policymakers are working to bring Main Street business investment into the 21st century.
Chairman of the Coalition for Business Development
Submitted via Virtual Newsroom