Office of the CEO

Entrex Inc.

48th Floor

311 South Wacker

Chicago, IL 60606

 

November 9, 2009

The Honorable Congressman Mark Schauer
United States House of Representatives
1408 Longworth House Office Building Washington, DC  20515

 

Subject:   “SBIC Eligible Securities”

 

Dear Congressman Schauer,

Thank you for voting in favor of HR 3854 aiming to create new jobs and stimulate the economy by providing small businesses, who represent such a large sector of the U.S. economy, with access to capital they need to expand their operations.

Solving these economic challenges is key:   today!  

In our discussion together the “immediacy” of your concerns for the companies and their employees,  your constituency, was truly compelling.  It's exciting to see governmental representatives as focused as you are with respect to the needs of small business, about the challenges they face, and about the economic opportunities to bring employment growth throughout America.

One point of clarity that we believe is important within HR 3854 revolves around the definition of “equity”, “debt” or other details associated with investments into SBIC fund entities or investments into portfolio companies of SBIC funds.   We believe clarity can be obtained by simply saying that these investments should conform to “SBIC eligible securities” already defined by the SBA.

This may be a minor point from a language standpoint, but the lack of clarity could limit the Bill to customary investment structures and exclude other beneficial investment structures that are especially helpful during this economic crises.

This simple clarification (“SBIC eligible securities”) is a term used throughout SBA regulation today and provides significant flexibility as new and important innovation become apparent to the SBA Administrator and her team.

We believe that by adding this clarity of language to the Bill, the institutional capital market (those groups which invest in SBIC entities) will see greater advantage in SBIC investment opportunities which in turn can bring immediate capital to your constituency and employment growth to local communicates.

I await your follow up and am available at your discretion.

                                                                        Sincerely,

Stephen H. Watkins

Entrex Inc.

CEO

cc:   Karen Mills, Administrator                      U.S. Small Business Administration