WASHINGTON – At a time when many small businesses are having problems accessing capital markets, a leadership proponent for small public companies testified this morning before the Subcommittee on Oversight and Investigations of the House Financial Services Committee, U.S. House of Representatives, about the need to modernize outdated securities laws and recommended modifying the Securities and Exchange Commission’s Rule 504 Exemption, a Reagan era reform that fueled the small business boom of the 1980s and 1990s, to ensure that small businesses of all kinds have the ability to raise funds.
“An important step in providing greater access to the capital markets for small public companies can be taken by reinstating a modified version of the SEC Rule 504 Exemption, which was among the reforms created by the Reagan Administration,” said Frank Speight, Cochairman of the National Small Public Company Leadership Council and Founder, Chairman and CEO of American Capital Partners Limited Inc., a registered Business Development Company based in West Palm Beach, Fla. “When small businesses don’t have the capital they need they are unable to make the investments they require to grow. And this, in turn, hampers growth in the overall economy,” Speight said.
Increase Cap, Streamline Filing Process
In calling for Rule 504 to be restored to its former parameters, Speight outlined modifications to the measure, including increasing the annual cap on the money that small businesses can raise to $2 million, from the former $1 million. “This change would allow small micro-cap public companies the access to the levels of capital they truly need,” he explained. Another change he urged would require the SEC to develop some kind of mechanism to streamline the process for the filing. “If a small public company is current in its SEC filings they should be allowed to file an easy 504 ‘notification filing’ with supporting documentation,” Speight said.
In his role as Cochairman of the Leadership Council, a Washington-based group that seeks to educate and inform the White House, Congress and Federal agencies about the issues impacting the nation’s small publicly-traded companies, Speight also congratulated the Subcommittee Chairwoman Sue Kelly on the House passage of the Kelly Bill called Increased Capital Access for Growing Businesses Act (H.R. 3170) that would modernize outdated securities laws to ensure that small businesses have better access to capital through Business Development Companies, or BDCs. “I have enjoyed working with Congresswoman Kelly on behalf of the Leadership Council,” he said of their mutual small business interests. “I am here today in support of her efforts and to urge that access to capital be broadened to encompass all small and developing companies.”
About the National Small Public Company Leadership Council
The National Small Public Company Leadership Council is a Washington, D.C.-based group that seeks to educate and inform the White House, Congress and Federal agencies about the issues impacting the nation’s small publicly-traded companies and the economic contributions they are making.
About American Capital Partners Limited Inc.
American Capital Partners Limited Inc., based in West Palm Beach, Fla., is a registered Business Development Company, a publicly traded investment company that invests in both public and private companies and generates capital for small businesses.
