Access to Small Business Investor Capital Act

S.1808, the 'Access to Small Business Investor Capital Act,' was introduced in the Senate on May 20, 2025, and subsequently referred to the Committee on Banking, Housing, and Urban Affairs. A companion bill, HR2225, also exists, indicating coordinated legislative effort. The bill's core mechanism is to permit registered investment companies to omit fees and expenses incurred from investments in Business Development Companies (BDCs) from their 'acquired fund fees and expenses' reporting. This regulatory adjustment is designed to reduce the reported cost of BDC investments for registered investment companies, thereby increasing their appeal. This bill does not involve direct government funding or appropriations. Instead, it provides regulatory relief that could indirectly channel private capital. By removing BDC fees from the acquired fund fees and expenses calculation, the bill aims to make BDCs a more attractive investment vehicle for registered investment companies. This structural change is intended to increase the flow of capital into BDCs, which in turn lend to small and mid-sized businesses. The benefit to BDCs would be an expanded investor base and potentially lower cost of capital, while small businesses would gain increased access to financing. Structural winners, should this bill pass, would be Business Development Companies such as Ares Capital Corporation ($ARCC), Main Street Capital Corporation ($MAIN), Hercules Capital, Inc. ($HTGC), Blackstone Secured Lending Fund ($BXSL), and Carlyle Secured Lending, Inc. ($CGBD). These companies would likely see increased institutional investor interest due to the improved regulatory treatment of their shares. The market data shows mixed performance for BDCs over the last 30 days, with $ARCC down 3.68%, $MAIN down 7.03%, $HTGC up 0.46%, $BXSL up 0.5%, and $CGBD down 2.3%. However, over the last 7 days, most BDCs have seen positive movement: $ARCC +3.16%, $MAIN +4.94%, $HTGC +6.9%, $BXSL +1.39%, while $CGBD is down 2.21%. This recent positive trend suggests some underlying strength in the sector. The bill is currently in the early stages of the legislative process, having been referred to committee. Its bipartisan sponsorship, with Senator McCormick (R-PA) and Senator Alsobrooks introducing it, suggests a degree of political support. The existence of a companion bill (HR2225) further strengthens its potential path. The next steps involve committee consideration, potential markups, and then a vote in the Senate, followed by the House if it passes the Senate. Given the early stage, passage is not guaranteed, but the bipartisan support and companion bill indicate momentum.