SBA Finalizes Rule Changes To Boost Critical Mineral & Tech Investments And Streamline License Applications

On January 2, the Small Business Administration (SBA) published a final rule to implement its Notice of Proposed Rulemaking from July 7, 2025 that was intended to remove regulations that are "obsolete, inefficient, or otherwise unnecessarily impede the licensing of small business investment companies (SBICs) and to remove certain barriers to investments in critical mineral extraction and processing and designated critical technologies."

The final rule published by the SBA can be found here.

Among other updates, the final rule revised the pre-existing restrictions on project financing to permit:

1. SBICs to invest in companies involved in long-term projects (those reasonably anticipated to have a duration exceeding 48 months) related to the extraction, conversion or processing of "Critical Minerals" identified as strategically important under Executive Order 14241.
2. Those SBICs licensed as a "Critical Technology Small Business Investment Company" to invest in "Critical Technologies."

Additionally, the final rule removed three requirements (Consistent or Reduced Leverage Management, Promotions from Within, and Inclusive Equity) for active licensees seeking to establish a new SBIC fund through the "Expedited Subsequent Fund Evaluation Process."

As a result of the final rule, the following eligibility criteria must be met by subsequent fund applicants:

1. Consistent Strategy and Fund Size
2. Clean Regulatory History
3. Consistent Limited Partner-General Partner Dynamics
4. Investment Performance Stability
5. Firm Stability
6. FBI Criminal and IRS Background Check
7. No Outstanding or Unresolved Material Litigation Matters
8. No Outstanding Tax Liens

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