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Recovery Act Changes To SBIC Program Mean Increased Funding Available For Small Businesses
WASHINGTON, July 10, 2009 (Release No. 09-47)Ė Effective today, small businesses that would otherwise have difficulty securing private equity or venture capital may find funding easier to get as a result of changes made as part of the American Recovery and Reinvestment Act to the U.S. Small Business Administrationís Small Business Investment Company program.
"The Recovery Act expands SBAís venture capital program to increase the pool of investment funding available to the Small Business Investment Companies licensed by SBA," said SBA Administrator Karen G. Mills. "We believe those companies will be better equipped by these changes to help sustain and grow small businesses for their next important growth steps."
SBICs are privately owned and managed venture capital firms which are licensed and regulated by SBA. SBICs use a combination of funds raised from private sources and money raised through the use of SBA guarantees to make equity and mezzanine capital investments in small businesses. There are approximately 338 SBICs with $17.4 billion in capital under management.
The changes made as part of the Recovery Act are:
Industry associations have commended SBA for these changes and SBA continues to encourage new SBICs to apply for licensing and actively participate in the program.
The SBIC program was created to stimulate the growth of Americaís small businesses by supplementing the long-term debt and private-equity capital available to them. Since the SBIC programís formation in 1958 through April 2009, it has invested approximately $56 billion in more than 106,000 small businesses in the United States. For more information about the SBAís Investment Division and SBIC program, go to www.sba.gov/INV or call 1-800-U ASK SBA.