Small Business Credit Availability Act

The Small Business Credit Availability Act (SBCAA), also known as the ‘omnibus spending package’, aims to increase the funding availability to small and mid-size private US companies and startups by increasing the capital available to business development companies (BDCs). It also amends the Investment Company Act of 1940, permitting BDCs to double the amount of leverage it can utilize, reducing the required asset coverage from 200% to 150%. The Act also reduces disparities in treatment for BDCs as compared to other SEC registrants under the Securities Act of 1933. This change has a significant impact in the non-bank direct lending market, allowing BDCs to increase their assets by up to one-third with additional debt and no new equity raised.