Small Business Investment Companies, or SBICs, are specially licensed by the U.S. Small Business Administration to provide federally insured financing to - yes, you guessed it - small businesses. Typically, a small business could receive a few hundred thousand dollars of financing from an SBIC that would include matching federal funds.

The program – which celebrated its 60th anniversary this year - has been an undisputed success. According to a 2017 report from the U.S. Library of Congress, more than $80.5 billion in capital has been deployed by SBICs into about 172,800 financings from 1958 through 2015, and these investments helped create millions of jobs during that period. There are dozens of firms in the Philadelphia area who are licensed for SBIC financing.

But even with all its success, the SBIC could be doing better. One of its biggest challenges is that many small businesses are being left out. Why? Geography.

The numbers show that six states (California, New York, Illinois, Texas, New Jersey and Massachusetts) accounted for almost half of the $5.5 billion of SBIC financing doled in fiscal 2018. Only 31 businesses across Pennsylvania received financing last year, and that amount - $130 million (or 2.3 percent of the total) - was significantly lower than the $317 million raised in 2017 and the lowest in the past five years. New Jersey is doing better, with 46 deals and $241.9 million in financings last year, up from 37 and $208.7 the year before.

As low as Pennsylvania is, many states are doing worse. Alabama and Wyoming each only had one SBIC financing in 2018. Vermont had two. Delaware, Puerto Rico and South Dakota each had three. The reason is obvious: follow the money. There are more financial firms in Los Angeles, New York and Chicago and they tend to spread the wealth locally. This lack of diversity has caught the eye of a few lawmakers, who introduced a bill last year to address the problem.

That bill – called The Spurring Business in Communities Act - unanimously passed the U.S. Senate last week and is awaiting Presidential approval.

Co-sponsored by U.S. Sen. Marco Rubio (R-FL) and U.S. Rep. Cathy McMorris Rodgers (R-WA), the proposed legislation would loosen the rules for forming an SBIC in their home states of Florida and Washington but also in Pennsylvania and other states that have been under-performing.

The bill would exempt firms from “under licensed” and “under financed” states that apply to become SBIC-approved from the law’s full capital requirements and give first priority to new applications from those states. The bill would also establish annual reporting requirements for the Small Business Administration that would show their progress towards reaching these goals.

Want to get SBIC money for your business? For starters, figure out if you want the financing to be debt, equity or a combination of both. If you can, lean to debt because, in my opinion, just getting a loan, as long as you can service it, is much better than giving up a piece of your company.

Also, make sure you’re eligible. Your company must have 51 percent of your employees and assets in the U.S. and to qualify as a “small business,” you generally need to employ fewer than 500 people.

Be careful too - some industries, like farming, real estate and finance, don’t qualify. Finally, get your historical numbers and files in order and work with an accountant or financial advisor to put together a sound business plan that will convince a potential SBIC that their return on investment is worth the bother. You can start searching for a local firm that provides this type of financing here.

How necessary is this? Very.

According to a recent Wells Fargo study, 47 percent of small businesses said that obtaining credit was "somewhat or “very easy” for them in the past 12 months. That’s certainly good news for the companies that can pass a bank’s credit requirements.

But what about the other 53 percent? The additional financing that could be available through SBICs in Pennsylvania with the signing of this bill could make a large difference for the majority of businesses that aren’t finding it as easy to raise capital.