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Committee Continues Focus on Promoting Small Business Access to Capital


Washington, Sep 20 -

Five bills that would make it easier for small companies to raise money and create jobs will be on the agenda Wednesday during a hearing of the Capital Markets and Government Sponsored Enterprises Subcommittee.

Raising capital is necessary for companies to create jobs, and the Financial Services Committee has
focused its attention on promoting capital formation since the beginning of the 112th Congress.  In November 2010, Chairman Spencer Bachus and Majority Whip Kevin McCarthy, a member of the Committee, urged the Securities and Exchange Commission (SEC) to take a number of steps that would help small companies raise capital.  Two of those proposals advocated by Chairman Bachus and Rep. McCarthy are now included in the Obama Administration’s plan to help facilitate small business capital formation.

“Our Committee continues to focus on breaking down government barriers to job creation and economic growth.  New and existing small businesses should not be hindered from accessing capital markets because of cumbersome and outdated regulations,” said Chairman Bachus.

Capital Markets and Government Sponsored Enterprises Subcommittee Chairman Scott Garrett said, “All across the U.S., American entrepreneurs are waiting to unleash their potential on the U.S. economy, but the federal government continues to stand in the way with burdensome and outdated capital formation rules.  Rather than tying up financial capital with unnecessary regulations, we need to liberate America’s entrepreneurs so they can do what they do best—create jobs and grow our economy.  As part of the ongoing effort by House Republicans to tear down barriers to economic growth and job creation, the Capital Markets Subcommittee will hold a hearing to discuss a number of bills that provide small businesses the flexibility they need to raise capital and invest in their businesses.”

The five legislative proposals to be discussed by the subcommittee will modernize SEC regulations and ensure the capital markets can be used as a vehicle for small companies to obtain the financing they need to grow, hire and invest. The bills are:

The Committee earlier approved two other bills designed to help small businesses gain access to capital financing.  In June the Committee approved a different bill offered by Rep. Schweikert, the Small Company Capital Formation Act (H.R. 1070).  The bill increases the offering threshold for companies exempted from SEC registration under Regulation A from $5 million to $50 million.  Increasing the threshold will lower the cost of raising capital for small businesses.

Also in June the Committee approved H.R. 1082, the Small Business Capital Access and Job Preservation Act, introduced by Rep. Robert Hurt.  The bill exempts advisers of private equity funds from costly SEC registration requirements.

For additional information regarding the hearing click here to view the memo. The hearing will begin at 10 am on Wednesday, September 21st in room 2128 Rayburn.