Hearing on Small Biz Finance BillsApril 13, 2016
On April 14, the House Financial Services Committee Subcommittee on Capital Markets and Government Sponsored Enterprises, will hold a hearing on several bills which will impact the small-business community and potentially increase access to capital. The hearing, ”The Jobs Act at Four: Examining its Impact and Proposals to Further Enhance Capital Formation,” will examine four separate bills aimed at helping small businesses access capital and grow.
The hearing will examine the NSBA-supported Micro-Offering Safe Harbor Act (H.R. 4850) which was introduced by Rep. Tom Emmer (R-Minn.). NSBA sent a letter to the committee in support of this legislation, which mirrors changes to the Securities Act which NSBA proposed in a 2013 white paper.
H.R. 4850 would create a registration exemption for offerings worth less than $500,000, offerings in which securities are only sold to friends and family of the issuer, or where there are not more than 35 purchasers of the securities. Additionally, the legislation would exempt these offerings from state registration and qualification requirements, often referred to as “blue sky laws.” If adopted, this measure would drastically cut down on the costs and the amount of paperwork necessary to complete one of these smaller offerings. The legislation currently has seven cosponsors, including House Small Business Committee Chairman Steve Chabot (R-Ohio). Please contact your representatives and urge them to support the Micro-Offering Safe Harbor Act.
The hearing will also examine the Private Placement Improvement Act (H.R. 4852), the Supporting America’s Innovators Act (H.R. 4854) and the Fix Crowdfunding Act (H.R. 4855).
- R. 4852 was introduced by Rep. Scott Garrett (R-N.J.) and if adopted it would require the Securities and Exchange Commission (SEC) to amend the requirements for Regulation D offerings. It would also direct the SEC to revise rules regarding 506 offerings of a private fund to characterize as an accredited investor “a knowledgeable employee” of that private fund or the fund’s investment advisor.
- Patrick McHenry (R-N.C.) introduced both H.R. 4854, which would amend the Investment Company Act of 1940 to expand the investor limitation for qualifying venture capital funds under an exemption from the definition of an investment company; and H.R. 4855which would amend the crowdfunding provisions included in the Jobs Act and would increase the crowdfunding limit from $1 million to $5 million.
Access to capital continues to be one of the most pressing issues facing the small-business community. All small businesses need an injection of capital at one point or another, unfortunately in the past several years it has become difficult for small businesses to get the funds they need to grow and expand. NSBA supports legislation like H.R. 4850 which will have an immediate and direct impact on small businesses looking to raise capital.