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Small Business Investment Companies
Small Business Administration; to provide equity capital and long term loan funds to small businesses; and to provide advisory services to small businesses.
The Small Business Administration maintains and strengthens the nation's economy by aiding, counseling, assisting and protecting the interests of small businesses and by helping families and businesses recover from national disasters.
See Appendix IV of the Catalog of Federal Domestic Assistance under Small Business Administration.
Program Accomplishments
Not Applicable.
Uses and Use Restrictions
The investment companies provide management and financial assistance on a continuing basis to eligible small business concerns.
Financial assistance is provided by making long-term loans to these small concerns, and/or by the purchase of debt or equity type securities issued by these firms.
Emphasis is on providing assistance to the pioneering, innovating-type concerns developing new products, processes, and markets.
Specialized investment companies organized/licensed under former Section 301(d) of the authorizing statute (SSBICs) must restrict eligibility of small concerns financed by such investment companies to those owned and operated by individuals whose participation in the free enterprise system has been hampered by social or economic disadvantages.
Debentures and participating securities are issued by the SBIC and guaranteed by SBA for a term not to exceed ten years.
All investment companies generally may not self-deal, finance 'big business,' or invest over 30 percent of private capital in any single small concern.
Eligibility Requirements
Applicant Eligibility
Any chartered small business investment company having private capital of not less than $5 million, having qualified management, giving evidence of sound operation, and establishing the need for SBIC financing in the geographic area in which the applicant proposes to operate.
Beneficiary Eligibility
Individual businesses (single proprietorship, partnership or corporation) which satisfy the established criteria of a small business. SSBICs beneficiary must also be a business owned and operated by socially or economically disadvantaged individuals.
Credentials/Documentation
An investment company must be chartered as a corporation, limited partnership (with individuals, corporation, partnership, or limited liability company as general partner), or limited liability company. Determination is made as to need in area, general business reputation and character of proposed owners and management and probability of successful operations. All loans to, or investments in, small concerns shall be of such sound value as reasonable to assure repayment. This program is excluded from coverage under 2 CFR 200, Subpart E - Cost Principles.
Aplication and Award Process
Preapplication Coordination
Preapplication coordination is not applicable.
Environmental impact information is not required for this program.
This program is excluded from coverage under E.O.
12372.
Application Procedures
This program is excluded from coverage under 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Request information and appropriate forms from SBA's Investment Division. Complete application requirements and submit with required application fee to SBA's Investment Division.
Award Procedures
Applicant is notified by issuance of a license from the Investment Division of the Small Business Administration.
Deadlines
Contact the headquarters or regional office, as appropriate, for application deadlines.
Authorization
Small Business Investment Act of 1958, Title III (15 U.S.C. 681 et seq.), Public Law 85-699.
Range of Approval/Disapproval Time
Average of 180 days.
Appeals
Proponents may reapply at any time.
Renewals
Additional information available at SBA's website at www.sba.gov.
Assistance Considerations
Formula and Matching Requirements
This program has no statutory formula. Matching Requirements: Additional information available at SBA's website at www.sba.gov. MOE requirements are not applicable to this program.
Length and Time Phasing of Assistance
Additional information available at SBA's website at www.sba.gov. See the following for information on how assistance is awarded/released: Information available at www.sba.gov.
Post Assistance Requirements
Reports
See information at www.sba.gov.
Additional information available at www.sba.gov.
Information available at www.sba.gov.
Additional information available at SBA's website at www.sba.gov.
Information available at www.sba.gov.
Audits
In accordance with the provisions of 2 CFR 200, Subpart F - Audit Requirements, non-Federal entities that expend financial assistance of $750,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Non-Federal entities that expend less than $750,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in 2 CFR 200.503. Annual audit by a certified public accountant and periodic examinations by SBA personnel.
Records
Current financial records, minutes of meetings of stockholders, general partners, directors, executive committees, and time spent and charges made for management consulting services performed must be maintained for 6 years.
Financial Information
Account Identification
73-1154-0-1-376.
Obigations
(Guaranteed/Insured Loans) FY 16 $2,514,000,000; FY 17 est $4,000,000,000; and FY 18 est $4,000,000,000
Range and Average of Financial Assistance
Additional information available at SBA's website at www.sba.gov.
Regulations, Guidelines, and Literature
13 CFR Chapter I, Part 107.
Information Contacts
Regional or Local Office
See Regional Agency Offices. See Appendix IV of the Catalog of Federal Domestic Assistance under Small Business Administration.
Headquarters Office
Joseph Shepard 409 3rd Street, SW 6th Floor, Washington, DC, District of Columbia 20416 Email: OII.FrontOffice@sba.gov Phone: 202-619-0384
Criteria for Selecting Proposals
Not Applicable.
Social Entrepreneurship
Spotlight
Social Enterprises Address Housing Crises
Funding for social enterprises and housing associations are extremely lacking. Nick O’Donohoe, Chief Executive, Big Society Capital points out that there is a need to “build bigger, more stronger, more resilient social enterprises” because they are “critical to growth and prosperity and quality of life in our community.”
