SBIC (Small Business Investment Company)

SBIC is the Small Business Investment Company

SBIC is a private investment company co-funded by the Small Business Administration. SBICs provide businesses with debt or equity financing options. The government understands the importance of small business to the US economy, so they started this program to really help businesses get off the ground. This is one of several small business-related programs supported by the government.

All of the SBICs are privately owned, but they are licensed and regulated by the Small Business Administration. Using their own capital and loan guarantees from the government these financial institutions make equity and debt investments into businesses. In order to get the financing, a business has to qualify as a small business. A business with a net worth of less than $18 million and an after-tax income of $6 million will qualify as a small business to receive funding.

In the United States, there are over 400 SBICs. Some of these companies will only invest in a specific area. They may be partial to a particular industry because their management could know more about that industry. There are some SBICs that will invest in any business venture. There is also a Specialized SBIC that will invest in a certain entrepreneur demographic.

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