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What is a small business investment company sbic

October 22 , 2020 |4 Comments

What Is A Small Business Investment Company

A small business investment company is a privately owned and managed investment fund that is licensed, regulated, and backed by the SBA. SBICs use a combination of funds raised from private sources and money raised through the use of SBA guarantees to make equity and capital investments in small businesses. The SBA matches SBIC funds at the rate of $2 for every $1 the SBIC puts in. In addition to funding small business growth and more jobs, SBICs offer management expertise and assistance to companies.

Small business investment companies are allowed to borrow from the federal government in order to augment the funds of private investors. An SBIC usually focuses on investments in the $100,000 to $250,000 range, and tend to be considerably more forgiving than venture capital firms in their underwriting requirements. The Small Business Administration typically matches the investment at a rate of $2 for every $1 investor put into a small business

A small business investment company (SBIC) is a type of privately-owned investment company that is licensed by the Small Business Administration (SBA). Small business investment companies supply small businesses with financing in both the equity and debt arenas. They provide a viable alternative to venture capital firms for many small enterprises seeking startup capital. * Small Business Investment Companies (SBIC) provide small businesses and startups with unique financing options. * SBIC’s are typically more forgiving and offer better terms than traditional banks and lenders. * Debentures are used to lay out the terms of the interest and repayment, with a standard repayment term of 10 years.

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How Does A Small Business Investment Company Work

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