Modernizing Capital Markets for America’s Entrepreneurs: Four Capital Access Developments Worth Following
America’s entrepreneurs have plenty of great ideas. Often, however, they just lack sufficient capital to support or launch their innovative ideas or growth opportunities.
Whether launching a startup, expanding a manufacturing operation, developing a breakthrough technology, or opening a new retail location, access to financing remains one of the most persistent challenges facing many entrepreneurs and small businesses.
The good news is that several important policy developments are moving in a positive direction within the federal agencies and on Capitol Hill. Collectively, they represent meaningful progress toward building a more modern, diverse, and accessible capital ecosystem for America’s entrepreneurs and small businesses.
Here are four developments SBE Council is monitoring or actively engaged on:
The Small Business Investment Company (SBIC) Program Is Expanding
One of the country’s most successful (and perhaps least understood) public-private partnerships just received an important boost.
The Investing in All of America Act, a bipartisan law signed by President Trump on May 19, strengthens the Small Business Administration’s (SBA’s) Small Business Investment Company (SBIC) program by raising leverage caps, expanding bonus incentives, and broadening the eligible investor base. The bill increases leverage limits to $250 million per SBIC fund and $475 million per family of funds, and creates new incentives for investments in rural communities, manufacturing, critical technologies, and low-income areas.
As Brett Palmer, President of the Small Business Investor Alliance (SBIA), recently told The Wall Street Journal, the SBIC program “has quietly become one of the most effective public-private partnerships in the country.”
● More than $53 billion in total capital under management is expected to approach $55 billion by year-end.
● $8.2 billion was invested in 1,315 small businesses during FY2025 alone.
● The program has strong long-term investment performance, producing a 17% gross internal rate of return and 2.0x total value to paid-in capital (TVPI) for 2013-2022 vintages.
● Less than 1% of government leverage is in default and no taxpayer subsidy since 2000.
Since 1958, SBIC funds have invested more than $147 billion in America’s small businesses. For example, they have supported companies like Apple, Intel, FedEx, and Tesla during their early years and have supported more than 10 million jobs since 1995.
The next challenge is expanding participation by private-market asset managers so even more capital can reach innovative entrepreneurs.
Checklist: Is Your Business in a Targeted SBIC Zone?
To qualify for the new “All of America” funding pools, a business generally needs to meet at least one of the following objective criteria. Entrepreneurs can self-check these in a relatively short amount of time.
The Geographic Check (Main Street & Rural)
HUBZone / Qualified Census Tract (QCT): Check the SBA HUBZone Map. If the business address is in a “Qualified Non-Metropolitan County” or a “Qualified Census Tract,” it automatically qualifies.
Low-Income Communities (LICs): Check the CDFI CIMS Map. If the area’s median family income is at or below 80% of the state or metropolitan median, the business is a potential target for SBIC bonus leverage.
The Sector Check (Manufacturing, Innovation and Tech)
SBIC fund benefits apply if the business fits into these industrial definitions:
Small Manufacturer: The business has a NAICS code in sectors 31-33 (Manufacturing) and meets SBA small business size standards (usually fewer than 500 to 1,500 employees, depending on the specific industry).
Critical Technology: The business designs, builds, or services technology tied to national resilience. This includes aerospace/space tech, critical mineral processing, advanced automated machinery, clean energy storage, or supply chain logistics software.
Crowdfunding Could Become a Much Bigger
One of the most promising recommendations emerging from the Security and Exchange Commission’s (SEC’s) 45th AnnualGovernment-Business Forum on Small Business Capital Formation is also one of the simplest. (Read the SEC’s full report to Congress, which wasdelivered on July 27, 2026.)
Recommendation #5 calls for increasing the Regulation Crowdfunding offering limit from $5 million to $20 million. Currently, a petition has been submitted to the SEC urging a proposed rulemaking that would raise the cap to that amount.
This matters because many successful businesses quickly “outgrow” today’s $5 million cap just as investor interest begins accelerating. Rather than continuing to raise capital from their customers, communities, employees, and supporters, they are often forced into more expensive financing alternatives, or postpone growth altogether.
As SEC Chairman Paul Atkins observed during this year’s Forum, 84% of early-stage businesses struggled to secure capital last year.
Crowdfunding has already demonstrated its ability to democratize investment opportunities and expand access to capital for entrepreneurs. Data compiled by Crowdfunding Capital Advisorscontinues to show strong growth in both debt- and equity-based crowdfunding, validating what SBE Council argued more than a decade ago when we helped lead the effort to legalize investment crowdfunding through the JOBS Act, and worked diligently to advance the framework’s rules.
Increasing the cap would simply allow a successful financing tool to work for more growing Main Street businesses.
401(k) Investment Rule Could Unlock Billions for Investment and Innovation
Another important development is now awaiting final action at the Department of Labor.
The proposed rule, “Fiduciary Duties in Selecting Designated Investment Alternatives,” has the potential to significantly expand investment opportunities within defined contribution retirement plans while opening new pathways for capital formation. (Read SBE Council’s comments in support of the proposed rule.)
For years, many 401(k) plan sponsors have been reluctant to include alternative investments such as private equity, venture capital, or private credit because of ERISA’s litigation risks and regulatory uncertainty.
The proposed rule would provide greater clarity for fiduciaries, making it easier to responsibly consider a broader range of investment options where appropriate.
For startups and innovative growth companies, the implications could be significant. America’s retirement system represents trillions of dollars in long-term investment capital. Even modest increases in allocations to professionally managed private market investments could help expand the pool of capital available to entrepreneurs while providing retirement savers with additional opportunities for long-term diversification.
SBE Council strongly supported this rulemaking because expanding investment choice and strengthening capital formation are complementary goals, not competing ones. (See my Real Clear Markets Op-Ed: “Investors and Business Both Gain From Trump’s Order on Private Equity.”)
INVEST Act Awaits Senate Action
Finally, one of the most comprehensive capital formation packages in years has already cleared the House with overwhelming bipartisan support.
The SBE Council-supported “Improving New Ventures and Economic Success Through Technology (INVEST) Act” (H.R. 3383) contains numerous reforms that would improve the capital ecosystem for entrepreneurs throughout a company’s life cycle.
Among its provisions are reforms that would:
● Modernize the accredited investor standard.
● Improve and clarify Regulation Crowdfunding rules.
● Expand flexibility surrounding Demo Days and early-stage fundraising.
● Streamline compliance for emerging-growth and high-growth companies.
● Reduce unnecessary regulatory barriers that discourage investment and innovation.
Taken together, these reforms would provide entrepreneurs with more financing options, greater regulatory certainty, and better access to the capital needed to launch, grow, and scale successful businesses.
The House has done its work. Now the Senate needs to complete the job.
The Big Picture
Individually, each of these capital access related developments addresses a different segment of America’s capital markets. Viewed together, they tell a much larger story.
America is beginning to modernize how entrepreneurs access capital – from community crowdfunding and retirement savings, to venture investment, institutional capital, and growth financing. Rather than relying on a single financingtions that evolves as their businesses grow
That has long been SBE Council’s vision: expanding opportunity, increasing competition among capital providers, modernizing outdated regulations, and giving entrepreneurs abundant choices to secure the financing they need.
Capital is the fuel that powers innovation, job creation, economic growth, and entrepreneurship. These developments, if successfully advanced, will move America closer to building the kind of capital marketplace that today’s entrepreneurs need to compete and succeed.
Karen Kerrigan is President & CEO of the Small Business & Entrepreneurship Council.
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