SBA Small Business Investment Company Program

Robert Jay Dilger
Senior Specialist in American National Government

Oscar R. Gonzales
Analyst in Economic Development Policy

The Small Business Administration (SBA) administers several programs to support small businesses, including loan guaranty programs to enhance small business access to capital; programs to increase small business opportunities in federal contracting; direct loans for businesses, homeowners, and renters to assist their recovery from natural disasters; and access to entrepreneurial education to assist with business formation and expansion. It also administers the Small Business Investment Company (SBIC) Program. Authorized by P.L. 85-699, the Small Business Investment Act of 1958, as amended, the SBIC program enhances small business access to venture capital by stimulating and supplementing “the flow of private equity capital and long term loan funds which small business concerns need for the sound financing of their business operations and for their growth, expansion, and modernization, and which are not available in adequate supply.” Facilitating the flow of capital to small businesses to stimulate the national economy was, and remains, the SBIC program’s primary objective.

The SBA does not make direct investments in small businesses. It works with 302 privately owned and managed SBICs licensed by the SBA to provide financing to small businesses with private capital the SBIC has raised and with funds the SBIC borrows at favorable rates because the SBA guarantees the debenture (loan obligation).

SBICs pursue investments in a broad range of industries, geographies, and stage of investment. Some SBICs specialize in a particular field or industry in which their management has expertise, while others invest more generally. Most SBICs concentrate on a particular stage of investment (i.e., start-up, expansion, or turnaround) and identify a geographic area in which to focus.

The SBIC program currently has invested about $15.0 billion in small businesses, with about $8.8 billion raised from private capital and $6.2 billion guaranteed by the SBA. In FY2010, the SBA guaranteed $931 million in SBIC small business investments, and SBICs provided another $1.1 billion in investments from private capital, for a total of more than $2.0 billion in financing for 1,331 small businesses.

Congressional interest in the SBIC program has increased in recent years primarily because it is viewed as a means to stimulate economic activity, create jobs, and assist in the national economic recovery. However, there are disagreements concerning whether the program should target additional assistance to startup and early-stage small businesses, which are generally viewed as relatively risky investments but also as having a relatively high potential for job creation.

This report examines the SBIC program’s structure and operation, focusing on SBIC eligibility requirements, investment activity, and program statistics. It also examines legislation considered during the 111th Congress, including H.R. 3854, the Small Business Financing and Investment Act of 2009, H.R. 5554, the Small Business Assistance and Relief Act of 2010, and P.L. 111-240, the Small Business Jobs Act of 2010, which address the following SBIC-related issues: (1) the targeting of additional assistance to startup and early-stage small businesses, (2) the SBA’s management of the program’s financial risk and its processing of SBIC applications, and (3) whether the program’s financing levels are appropriate given the nation’s current economic circumstances.


Date of Report: June 23, 2011
Number of Pages: 45
Order Number: R41456
Price: $29.95

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The Department of Housing and Urban Development (HUD): FY2011 Appropriations

Maggie McCarty, Coordinator
Specialist in Housing Policy

Libby Perl
Specialist in Housing Policy

Bruce E. Foote
Analyst in Housing Policy

Katie Jones
Analyst in Housing Policy

Eugene Boyd
Analyst in Federalism and Economic Development Policy

The Department of Housing and Urban Development (HUD) is the federal agency charged with administering a number of programs designed to promote the availability of safe, decent, and affordable housing and community development. The agency submits a budget as a part of the President’s formal budget request each year, and then Congress, through the appropriations process, decides how much funding to provide to the agency. Funding for HUD is under the jurisdiction of the Department of Transportation, HUD, and Related Agencies subcommittees of the House and the Senate appropriations committees.

Regular appropriations for HUD (not including emergency supplemental funding) have increased by 57% in the nine years prior to FY2011. This increase in the HUD budget has been partly attributable to increased funding for HUD programs, particularly the Section 8 programs, which have had a 70% increase in funding over this period and have grown to account for well over half of HUD’s total budget. The increase in funding has also resulted from a decrease in the amount of rescissions, collections, and receipts available to offset the cost of the HUD budget.

For FY2011, the President’s budget requested about $45.57 billion in net new budget authority for HUD, a decrease of about 1% from the FY2010 enacted level. However, the requested decrease in net new budget authority would actually include a 3% increase in appropriations for HUD programs in aggregate. The overall increase in appropriations requested would be more than offset by a substantial increase in offsetting collections and receipts, which are estimated to come from proposed changes to the Federal Housing Administration (FHA) mortgage insurance programs. The two Section 8 rental assistance programs were requested to receive the largest increases, followed by increases for programs for the homeless and for HUD’s research and technology needs. The President’s budget proposed decreased funding for other programs, such as programs providing housing for persons who are elderly or disabled and capital repairs in public housing, and the brownfields redevelopment program would no longer be funded.

The House Appropriations Committee reported its version of the FY2011 HUD funding bill on July 26, 2010 (H.R. 5850, 111th Congress), and it passed the full House on July 29, 2010. The Senate Appropriations Committee approved its version (S. 3644, 111th Congress) on July 23, 2010. The House-passed version would have provided $46.55 billion for HUD in FY2011 and the Senate committee-reported version would have provided $46.59 billion, about $1 billion more than the President’s request.

When no appropriations legislation was enacted before the beginning of FY2011, the 111th Congress enacted a series of continuing resolutions (CR) to continue funding at the FY2010 level for most accounts in the federal budget, including all of the accounts in HUD’s budget. The last CR of the 111th Congress extended funding into the 112th Congress. On February 18, 2011, the House approved H.R. 1, a year-long CR which would have resulted in an overall reduction in funding for HUD. H.R. 1 was rejected by the Senate on March 9, 2011. The 112th Congress approved three short-term CRs before enacting a final year-long CR that was signed into law (P.L. 112-10) on April 15, 2011. The final FY2011 appropriations law cut funding for HUD, relative to FY2010, but not as deeply as proposed in H.R. 1. The act also included a 0.2% acrossthe- board rescission for all discretionary accounts, including those in HUD’s budget.


Date of Report: June 24, 2011
Number of Pages: 45
Order Number: R41233
Price: $29.95

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Child Welfare: Recent and Proposed Federal Funding

Emilie Stoltzfus
Specialist in Social Policy

Child welfare services and supports are intended to ensure and improve the safety, permanence, and well-being of children. This report discusses the President’s FY2012 budget request for child welfare programs, as submitted to Congress on February 14, 2011. It compares that request to the funding provided by Congress for those same programs in FY2010 and for FY2011. Most child welfare programs are administered by the Administration for Children and Families (ACF) within the Department of Health and Human Services (HHS). However, a few are administered by the Office of Justice Programs at the Department of Justice.

The President’s FY2012 budget seeks close to $8.3 billion for the child welfare programs discussed in this report. This includes $250 million to support the first year of a 10-year ($2.5 billion) legislative proposal for foster care reform. With these funds the Administration proposes to (1) provide incentives to states to improve the safety, permanence, and well-being of children in, or at risk of entering, foster care; (2) reduce “costly and unnecessary” administrative requirements tied to the federal foster care program; and (3) support greater use of proven strategies to continue states’ success at improving certain child welfare outcomes while also expanding knowledge about those strategies by allowing states to test innovative programs. The President’s budget also calls for a five-year reauthorization of the Promoting Safe and Stable Families program that is aligned with this reform proposal and assumes continued funding at the level provided for FY2011.

Overall, the President seeks FY2012 funding for the child welfare programs discussed in this report that is a little less than the FY2010 (P.L. 111-117) funding appropriated for them ($8.4 billion), but that is more than the level of funding provided for those programs in FY2011 ($7.7 billion) (P.L. 112-10). About 92% of the funding discussed in this report is provided on a mandatory basis and the Title IV-E Foster Care and Permanency program, which is funded on an open-ended entitlement basis, represents the largest part of that mandatory funding. Accordingly, the changes in overall funding, as provided and as requested, are due primarily to the Obama Administration’s expectation of different funding levels needed for the Title IV-E Foster Care and Permanency program. Specifically, for FY2011, as enhanced federal support under the Title IV-E program (enacted earlier as part of economic stimulus legislation) is phased out, the Administration expects states to claim less Title IV-E foster care funding and to make relatively modest increased claims for Title IV-E permanency support (i.e., adoption and kinship guardianship assistance). However, the Obama Administration requests Title IV-E program funding for FY2012 that is above the expected FY2011 program needs (but not as high as FY2010). The increased FY2012 request for the program is based on an expectation of expanded state permanency claims as well as a legislative proposal (discussed above) to provide incentive funding to states that improve certain outcomes for children in foster care and for other program improvements.

Only about 8% of the child welfare funding discussed in this report is provided on a discretionary basis. CRS estimates that P.L. 112-10 will provide about $11 million less for child welfare programs with discretionary funding as compared to their FY2010 funding. At the same time, the FY2011 funding level for these programs is expected to be only about $2 million less than the amount requested by the Obama Administration for those same programs in FY2012. 

Table 1 in this report shows the share of dedicated child welfare funding provided by general category for recent years, including final funding for FY2011 and requested funding for FY2012. Table 2 includes recent and proposed funding levels by child welfare program.


Date of Report: June 15, 2011
Number of Pages: 24
Order Number: RL34121
Price: $29.95

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Authority of the Secretary of HHS to Make Exceptions to Minimum Earnings Requirement for Eligibility Under the CLASS Act

To: Hon. Charles Boustany, Jr.
Attention: Mike Thompson

From: Edward C. Liu, Legislative Attorney,

This memorandum responds to your request for an analysis of the scope of the authority of the Secretary of Health and Human Services to define exceptions to the minimum earnings requirement for purposes of being considered an eligible beneficiary under § 3202(6)(C) of the Public Health Service Act (PHSA) as added by the Community Living Assistance Services and Supports Act (CLASS Act).


Date of Report: March 15, 2011
Number of Pages: 4
Order Number: M-031511
Price: $19.95

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Analysis of Flood Insurance Premiums Written Versus Claims for Michigan, Florida, and Louisiana Under the National Flood Insurance Program: 1978-2010

TO: Honorable Candice S. Miller
Attention Kyle T. Burleson

FROM: Rawle O. King
Analyst in Financial Economics and Risk Assessment

This memorandum responds to your request for an analysis of flood insurance premiums and claims for Michigan, Florida, and Louisiana under the National Flood Insurance Program (NFIP).  Based on data provided by the Federal Emergency Management Agency, CRS calculated premium-to-claims ratios for Michigan, Florida, and Louisiana.  The ratio shows the relationship between premiums and claims: a ratio of more than 1 indicates more premiums were collected than claims paid in a given year; a ratio of less than 1 indicates that claims exceeded premiums.


Date of Report: February 14, 2011
Number of Pages: 9
Order Number: M-021411
Price: $19.95

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To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.