Small Business Investment Companies (59.011)

Program

59.011 Small Business Investment Companies

Federal Agency

Agency: Small Business Administration

Authorization

Small Business Act of 1958, Public Law 85-699.

Program Number

59.011

Last Known Status

Active

Objectives

To establish privately owned and managed investment companies, which are licensed and regulated by the U.S. Small Business Administration; to provide equity capital and long term loan funds to small businesses; and to provide advisory services to small businesses.

Types of Assistance

ADVISORY SERVICES AND COUNSELING; DIRECT LOANS; GUARANTEED/INSURED LOANS

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 20 percent (30 percent for SSBICs) 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 $3,000,000 (for those choosing to not receive leverage from SBA) or $5 million (for those receiving leverage from SBA), having qualified management, and 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 OMB Circular No. A-87.

Application 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 Procedure

This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under OMB Circular No. A-110. 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 Procedure

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.

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: Additional information available at SBA's website at www.sba.gov.

Post Assistance Requirements

Reports

Additional information available at SBA's website at www.sba.gov. Additional information available at SBA's website at www.sba.gov. Additional information available at SBA's website at www.sba.gov. Additional information available at SBA's website at www.sba.gov. Additional information available at SBA's website at www.sba.gov.

Audits

In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Non-Profit Organizations," nonfederal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133. 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.

Program Accomplishments

Fiscal Year 2008: Additional information available at SBA's website at www.sba.gov. Fiscal Year 2009: Additional information available at SBA's website at www.sba.gov. Fiscal Year 2010: Additional information available at SBA's website at www.sba.gov.

Financial Information

Account Identification

73-1154-0-1-376.

Obligations

(Salaries) FY 08 $17,097,000; FY 09 est $19,396,000; FY 10 est $21,439,000

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.

Related Programs

Not Applicable.

Information Contacts

Regional or Local Office

See Regional Agency Offices. Additional information available at SBA's website at www.sba.gov.

Headquarters Office

David Lippold 409 3rd. Street, SW, Suite 6000, Washington, District of Columbia 20416 Email: david.lippold@sba.gov Phone: 202-205-6569

Web Site Address

http://www.sba.gov.

Examples of Funded Projects

Not Applicable.

Criteria for Selecting Proposals

Not Applicable.