H.R. 5559 — Investments in Innovation Act of 2025

This section authorizes Small Business Investment Companies (SBICs) to exclude the cost basis of equity investments in socially and economically disadvantaged small business concerns (as defined in section 8(a)(4) of the Small Business Act, i.e., businesses owned by individuals who are socially or economically disadvantaged) when calculating outstanding leverage under SBIC leverage limits, up to 50% of the company's private capital. (The SBIC program enables licensed private investment funds to leverage SBA-guaranteed debentures—typically up to 300% of private capital—to provide equity capital and long-term loans to small businesses.) It further limits maximum outstanding leverage to the lesser of 300% of private capital or $175 million for any one qualifying SBIC licensed in the first fiscal year after enactment or later that certifies at least 50% of its investments will be in such disadvantaged businesses, or $250 million aggregate for two or more such commonly controlled SBICs.