I suggest that SBA looking into finding support (guarantees, arrangements with banks) to support royalty funds for small businesses (in rural and inner cities) that have not got the growth of gazelles that would support venture capital and are not big enough to support debt or mezzanine. Royalty funds are an emerging "near equity" instrument that is being put to good and effective use in places like NH (www.vestedforgrowth.com) and VT (http://www.vsjf.org/what-we-do/flexible-capital-fund/about-flexible-capital). There are many capital gaps--two of which SBA is addresssing through its debenture SBIC program--but this gap is pernicious and problematic for good ventures with good growth in underserved rural and urban markets.
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