SBIC Financing
The Small Business Administration (SBA) also sponsors an equity investment program known as the Small Business Investment Corporation (SBIC), which is a series of privately owned investment funds licensed by the SBA. Essentially, the SBIC program is a public-private partnership designed to flow venture dollars in to emerging companies. With the SBA contribution, the SBIC funds can vastly leverage their private investor dollars. Essentially, they are SBA-sponsored venture funds that may or may not have a debt element.
Between FY 1994 and 2002, the SBIC funded 8% of the venture market investments for a total of 23.7 billion dollars—and this figure represents only the financings that contain equity features. 2.7 billion dollars was funded in FY 2002 alone. A large percentage of fund dollars go to low and moderate income businesses in more diverse parts of the country than the investments of conventional venture funds. Information on the SBIC program can be found at Www. sba. gov/INV, as well as a list of SBIC sponsored funds in your area.
