Small business investment company is making entrepreneurs dreams come alive.
Small Business Investment Company (SBIC) is co-funded by the Small Business Administration. They are setup to assist entrepreneurs in getting their businesses off the ground. The government has recognized that small businesses are responsible for millions of jobs throughout the country, and that they are a vital part of our economy. For this reason they sponsor programs such as this.
The Small Business Investment Company is one of several financing programs put out the SBA and the government for entrepreneurs. All of the SBICs are privately owned, but they are licensed and regulated by the SBA. They use their own capital and also guaranteed loans from the SBA to make equity and debt investments into businesses that qualify for the program. The SBA does not invest directly into the businesses.
Only companies that are considered "small" qualify for an investment from the Small Business Investment Company. The SBIC program generally qualifies any businesses with a net worth less than $18 million and after tax net income should not exceed $6 million for two years in a row. Today there are over 400 licensed SBICs through the United States. The industry that the SBIC wants to invest in varies from company to company. Some will invest in an industry that their management team has experience in, and others will invest into almost any business.
There is also a Specialized Small Business Investment Company that will invest in businesses which are owned by disadvantaged entrepreneurs.