House Small Business panel spotlights SBICs to broaden investment in rural manufacturing and critical tech

WASHINGTON — The House Committee on Small Business heard testimony Tuesday on how public‑private investment vehicles can expand financing to small firms, particularly in rural communities and critical‑technology manufacturing, and on whether recent changes at the Small Business Administration (SBA) could hamper oversight.

Chairman Williams, Chair of the House Committee on Small Business, opened the hearing on “Fueling America’s Future: How Investment Empowers Small Business Growth,” saying the session would examine “the essential role of private capital and public‑private partnerships” and highlighting the SBIC program as a model for channeling private investment to small businesses.

The hearing featured three witnesses who run or advise private‑market investment programs: Brett Palmer, president of the Small Business Investor Alliance; Bill Baumel, managing director of Ohio Innovation Fund; and Anthony Cimino, vice president and head of policy at Carta. They described SBICs as a mechanism that leverages private capital with SBA‑backed funds to reach small businesses that traditional bank lending often bypasses.

“SBICs are privately owned companies that are licensed and regulated by the SBA,” Brett Palmer said. He told the committee SBICs “raise private capital to invest in small businesses through debt and equity” and argued the program has helped finance firms across manufacturing and other industries. Palmer cited program statistics presented during the hearing: more than 194,000 SBIC investments and roughly $130,000,000,000 deployed to small businesses as of 2024.

Witnesses and members also discussed the Investing in All of America Act, legislation introduced to incentivize SBIC investment in rural and underserved areas and in manufacturing and critical technologies. Representative Dan Meuser of Pennsylvania, who was cited as the bill’s sponsor during opening remarks, and other members described the measure as a market‑oriented way to broaden geographic and sectoral reach without direct subsidies.

Several members pressed witnesses on how SBICs support national security goals. Palmer described recent collaboration between the SBA and the Department of Defense (DoD), saying “the Department of Defense partnership with the SBA is a really good idea” and that SBICs can direct capital to firms working on technologies relevant to defense supply chains.

Witnesses emphasized the program’s role in expanding regional investment. Anthony Cimino of Carta said SBICs allocate capital more broadly than venture capital: “When you look at the SBIC program, only 10% of the capital went to California,” he said, contrasting that with venture allocations concentrated on the coasts. Bill Baumel described examples from the Midwest where private investment has scaled manufacturing and biotech firms and created local angel‑investor networks.

Lawmakers raised practical questions about SBIC operations. Members from largely rural districts—among them Representatives Pete Stauber, and other committee members—asked how smaller funds could form and operate in low‑population states and territories. Witnesses said forming and operating an SBIC still carries fixed legal and compliance costs that can be a barrier for smaller, locally focused funds and urged congressional steps to lower entry friction for emerging managers.

Multiple lawmakers and witnesses also expressed concern about SBA workforce reductions announced by the agency. Palmer told members the SBIC program manages about $50,000,000,000 of program activity while operating on roughly $11,000,000 in salary costs and warned that cuts to experienced SBA staff could risk the technical licensing, oversight and taxpayer protections SBICs rely on. Cimino and others urged that fees collected by the program remain available to maintain SBIC operational capacity.

Members from both parties and witnesses agreed on several policy directions discussed at the hearing: support the Investing in All of America Act to expand incentives for rural and manufacturing investment; continue SBIC program enhancements such as accrual and reinvestor structures and fund‑of‑fund models to develop regional managers; and preserve staffing and program resources needed for licensing and oversight.

The committee took no formal votes at the hearing. Chairman Williams closed by asking witnesses to respond to any additional written questions and adjourned the session.

The hearing brought private managers and policy makers together to discuss ways to broaden who receives investment, how public leverage can be targeted to underserved regions and industries, and how to preserve program capacity amid agency reorganizations.