Q: I'm hearing more about SBICs as a way for small businesses to get outside investment. How do they help private companies?
—R.P., Detroit
A: Your question is a timely one. Small business investment companies provided $1.59 billion to small businesses in 2010, the highest single-year volume in the program's 52-year history, according to the U.S. Small Business Administration. SBICs are for-profit venture capital firms, privately owned and managed but licensed and regulated by the SBA.The SBIC program was started in 1958 to make capital investments in U.S.-based small businesses. Companies with tangible net worth of $18 million or less and average net profits of less than $6 million over the previous two years are eligible for SBIC investment. Funding from SBICs boomed in fiscal year 2010, increasing 23 percent over the previous four years.
To read the full, original article click on this link: Small Business Investment Companies Explained - BusinessWeek
Author: Karen E. Klein
