ABSTRACT

SBA Small Business Investment Company Program [October 23, 2014]   [open pdf - 472KB]

"The Small Business Administration's (SBA's) Small Business Investment Company (SBIC) program is designed to enhance small business access to venture capital by stimulating and supplementing 'the flow of private equity capital and long-term loan funds which small-business concerns need for the sound financing of their business operations and for their growth, expansion, and modernization, and which are not available in adequate supply.' Facilitating the flow of capital to small businesses to stimulate the national economy was, and remains, the SBIC program's primary objective. As of September 30, 2014, there were 294 privately owned and managed SBA-licensed SBICs providing small businesses private capital the SBIC has raised (called regulatory capital) and funds the SBIC borrows at favorable rates (called leverage) because the SBA guarantees the debenture (loan obligation). SBICs pursue investments in a broad range of industries, geographic areas, and stages of investment. Some SBICs specialize in a particular field or industry, and others invest more generally. Most SBICs concentrate on a particular stage of investment (i.e., startup, expansion, or turnaround) and geographic area. The SBIC program has invested or committed about $22.5 billion in small businesses, with the SBA's share of capital at risk about $10.7 billion. In FY2014, the SBA committed to guarantee $2.55 billion in SBIC small business investments. SBICs invested another $2.92 billion from private capital for a total of almost $5.5 billion in financing for 1,085 small businesses. P.L. 113- 76, the Consolidated Appropriations Act, 2014, increased the annual amount of leverage the SBA is authorized to provide to SBICs to $4 billion from $3 billion."

Report Number:
CRS Report for Congress, R41456
Author:
Publisher:
Date:
2014-10-23
Copyright:
Public Domain
Retrieved From:
National Agricultural Law Center: http://www.nationalaglawcenter.org/
Format:
pdf
Media Type:
application/pdf
URL:
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