Fill me in: In a largely bipartisan vote, the House on Tuesday passed the JOBS and Investor Confidence Act, more commonly known as JOBS Act 3.0 reform, 406-4. The legislation would amend U.S. securities laws and help small and midsize businesses raise the capital they need to expand and hire more employees, culminating years of work in the House to expand on the successful 2012 Jumpstart our Business Startups (JOBS) Act.
Why does it matter? New regulations over the past decade have made it harder for banks to lend to small and midsized businesses, contributing to a sharp decline in small business loans and steep drop in the number of new business starts. The JOBS Act 3.0 would eliminate barriers to raising capital for many different types of companies – from startups seeking angel funding, to established businesses raising capital through private channels, to companies considering whether to complete an initial public offering – all of which would help fuel our country’s economic growth.
Number to know: 50%. The United States is now home to roughly half the number of public companies that existed 20 years ago. When businesses go public, they experience their highest rate of job creation and wealth creation for mom-and-pop investors. Conversely, when companies can’t grow, it’s Main Street that feels the pinch.
Our take: “This bipartisan legislation will help small and mid-size businesses raise the capital they need to expand, innovate, and hire new employees. It is a win for entrepreneurs, businesses and job creators across the country.” – U.S. Chamber Center for Capital Markets Competitiveness Executive Vice President Tom Quaadman (read the full statement here).
What’s next? The House vote clears an important hurdle for the legislation, but this is just the first step. The bipartisan passage is promising sign and evidence of the urgent importance. Now, attention turns to the Senate, which should take up and approve this legislation so that America’s businesses can continue to grow, innovate and create jobs.
The Wall Street Journal: To Restore U.S. Competitiveness, Pass the JOBS Act 3.0
Washington Examiner: House sets vote next week on major financial regulation reform package
Related: Reinvigorating IPOs in America