H.R. 5559: Investments in Innovation Act of 2025

This bill, known as the Investments in Innovation Act of 2025, aims to amend the Small Business Investment Act of 1958. Specifically, it focuses on how small business investment companies calculate their leverage limits. Here are the key points:

Key Provisions

• Leverage Limit Adjustment: The bill allows small business investment companies to exclude certain amounts from their leverage limit calculations. This specifically pertains to investments made in socially and economically disadvantaged small businesses.
• Definition of Investment: The investments eligible for exclusion from the leverage calculation are defined as equity investments in smaller enterprises recognized as socially and economically disadvantaged. This aligns with existing definitions in the Small Business Act.
• Investment Cap: The total amounts excluded from the leverage calculation cannot exceed 50 percent of the company's private capital.
• Maximum Leverage Availability: The legislation outlines caps on the amount of leverage that can be made available to companies:
  • For a single company, it cannot exceed the lesser of 300% of the private capital or $175 million.
  • If there are two or more companies under common control, the maximum leverage cannot exceed $250 million.
• Investment Requirement: A company must certify that at least 50 percent of its overall investments will go towards socially and economically disadvantaged small businesses to qualify for these provisions.

The intention behind this bill is to encourage more investment in businesses that may face challenges due to their social or economic status, thereby promoting economic growth in underserved areas.

Relevant Companies

• None found