Small Business Investment Company (SBIC)
Small Business Investment Companies are privately owned and managed investments funds that are licensed and regulated by the Small Business Administration (SBA). SBICs use their own capital, plus funds borrowed with an SBA guarantee, to make equity investments in and long-term loans to qualified small businesses. The capital is typically utilized for growth, expansion, and modernization.
To qualify, the company typically has a net worth of $18.0 million or less and its average after tax net income for the prior two years does not exceed $6.0 million. SBICs provide funds to a broad range of industries, geographies, and businesses at various stages of the business life cycle.
A small business investment company, or SBIC, can be a valuable source of funding for ongoing business needs. The classic SBIC definition includes the primary goal of these companies, which is to invest in small businesses in order to derive a profit for shareholders and investors. SBIC lenders are usually overseen and licensed by the U.S. Small Business Administration (SBA); as a result, most SBIC fund arrangements are governed by strict guidelines set out by that agency. These funding solutions can provide real benefits to small businesses by allowing them to obtain necessary funding more readily and at better terms than might otherwise be available to them. SBIC lenders benefit from these arrangements by gaining access to low-interest loans from the SBA to fund their small business investments. These loans and matching funds arrangements are intended to provide added incentive for investors to promote the growth of small businesses throughout the country.
CNF Exchange offers small businesses and SBIC funding sources the chance to connect with each other online through its exclusive Investor Exchange system. This online platform provides a way for businesses to upload their funding requests and loan applications online for review by a number of lenders and investors. The prospective borrowers can then evaluate the lending proposals offered by this SBIC fund providers and determine the most advantageous arrangements for their specific financial needs. CNF Exchange makes it easy to find the right lending arrangement that benefits both parties and provides valuable funding for small business operating needs.