New Law Incorporates Small Business Feedback

President Obama signed the Jumpstart Our Business Startups Act (JOBS) recently, making it easier for small businesses and entrepreneurs to obtain much needed access to capital. This new law is expected to create an enhanced environment for growth.
 
Last year, senior SBA officials traveled around the country listening to entrepreneurs. SBA officials say they heard the concerns regarding barriers to expansion, particularly for high-growth industries, and the need for a simplified process that any business could use to grow and create jobs.
 
The Small Business Investment Company (SBIC) program, a source of equity capital for high-growth companies, had already licensed twice the number of funds in half the time in FY 2011 compared to the average from FY 2006 through FY 2009. In FY 2011, the SBIC Program provided a 50-year record high of $1.6 billion in financing for small businesses. SBA also revitalized the Small Business Innovation Research (SBIR) program and helped agencies distribute $2.5 billion in funding to qualified small businesses.
 
However, the JOBS Act will benefit both Main Street small businesses as well high-growth entrepreneurs. Before the JOBS Act, a coffee shop in Akron that wanted to franchise itself would be limited to accredited investors, according to the SEC or angel investors, and that slowed growth, giving an advantage to wealthier investors and the small businesses they have relationships with. Recognizing the difficulty of finding capital at the earliest stages of expansion, this act should help small businesses raise money from customers and investors in their communities.
 
The JOBS Act also addresses some of the barriers for small businesses ready to make an IPO. These changes to the Securities Exchange Commission (SEC) rules include measures to streamline the process and reduce the cost and complexity. The bill was supported by both parties. The SBA stated in a press release, "The JOBS Act empowers our small businesses to do what they do best: grow and create jobs."