Small Business Investment Companies
Program Funding
Annual program obligations reported to SAM.gov.
Program Objective
To establish privately owned and managed Small Business Investment Companies (SBICs), which are licensed and regulated by the U.S. Small Business Administration (SBA), and to issue debt to licensed SBICs that may provide private equity capital and long term loan funds to small businesses and provide advisory services to small businesses in which they invest.
Eligibility
Eligible Applicants
- Small Business Person
Any chartered small business investment company having private capital of not less than $5 million, having qualified management, giving evidence of sound operation, and establishing the need for SBIC financing in the geographic area in which the applicant proposes to operate. For more information, please go to: https://www.sba.gov/partners/sbics/apply-be-sbic#section-header-4.
Beneficiaries
- Small Business Person
Individual businesses (single proprietorship, partnership or corporation) which satisfy the established criteria of a small business. For more information, please go to: https://www.sba.gov/partners/sbics/apply-be-sbic#section-header-6.
How to Apply
Award Procedure
Applicant is notified by issuance of a license from SBA’s Office of Investment and Innovation.
Applying for an SBIC license is generally a three phase process and may take up to two years. In the second phase of the process, applicants are given 18 months to raise the private capital needed to be viable and submit required information for licensing. For more information on the licensing process, please go to: https://www.sba.gov/partners/sbics/apply-be-sbic.
Program details & compliance
Description
To establish privately owned and managed Small Business Investment Companies (SBICs), which are licensed and regulated by the U.S. Small Business Administration (SBA), and to issue debt to licensed SBICs that may provide private equity capital and long term loan funds to small businesses and provide advisory services to small businesses in which they invest.
Mission Categories
Primary: Small Business
Other categories:
Minority Business Enterprise
Use of Funds
Allowed Uses
SBICs provide management and financial assistance on a continuing basis to eligible small business concerns in which they invest. Financial assistance is provided by making long-term loans to these small concerns, and/or by the purchase of debt or equity type securities issued by these firms. Emphasis is on providing assistance to the pioneering, innovating-type concerns developing new products, processes, and markets. Specialized investment companies (SSBICs) organized/licensed under former Section 301(d) of the authorizing statute must restrict eligibility to small concerns owned and operated by individuals whose participation in the free enterprise system has been hampered by social or economic disadvantages. Debentures are issued by leveraged SBICs and guaranteed by SBA for a term generally not to exceed ten years. SBICs may not self-deal, finance "big business," or invest over 10 percent of combined capital in any single small concern.
Required Documentation
A small business investment company must be chartered as a corporation, limited partnership (with individuals, corporation, partnership, or limited liability company as general partner), or limited liability company. Determination is made as to need in area, general business reputation and character of proposed owners and management and probability of successful operations. All loans to, or investments in, small concerns shall be of such sound value as reasonable to assure repayment. For more information, please go to: https://www.sba.gov/partners/sbics/apply-be-sbic#section-header-4.
Matching Requirements
Statutory formula is not applicable to this assistance listing.
Matching Requirements: Additional information available at SBA's website at https://www.sba.gov/partners/sbics/forms-guides#section-header-2.
Matching requirements are mandatory.
MOE requirements are not applicable to this assistance listing.
Reporting & Compliance
Applicable 2 CFR 200 Subparts
- Subpart F — Audit Requirements