Improving SBA Engagement on Employee Ownership Act

H.R. 5778 would strengthen the Small Business Administration's (SBA) engagement with employee-owned businesses, including worker cooperatives and employee stock ownership plans (ESOPs). The bill has passed committee review and is eligible for a House floor vote.

If enacted, the bill would require the SBA administrator to actively participate in federal working groups and meetings focused on employee ownership and cooperatives. It would also direct the SBA to expand outreach through its Small Business Investment Company program to help lenders, investors, and entrepreneurs understand how to finance transitions to employee ownership. Additionally, the bill would require the SBA to establish a Small Business Employee Ownership and Cooperatives Promotion Program to provide technical assistance and training on transitioning to employee ownership structures.

Proponents argue the bill would help more workers build wealth through ownership stakes in their companies and support small business succession planning. The legislation passed the House Small Business Committee unanimously with bipartisan support.