The Small Business Investment Company (SBIC) Program was created to provide venture capital to small businesses. SBIC's are licensed and regulated by the Small Business Administration (SBA) but they are private, profit-seeking investment companies.
Most SBIC's seek out a wide variety of investment opportunities in partnership with small businesses. Some specialize in a particular field. Some seek out businesses developing products or services in growth industries.
SBIC's provide equity (venture) capital, long-term loans, and a combination of debt/equity investments to small businesses. They also provide management assistance. They use their own funds to make venture capital investments. They also use borrowed funds that they obtain with an SBA guaranty.
In order to be eligible for a SBIC investment, the small business must meet the SBA definition of "small." This means that the small business has a net worth of $18 million or less and has an average net income for the preceding two years not exceeding $6 million. There are exceptions to this based on the industry.
The SBA publishes a list of all currently licensed SBIC's.
