Small Business Investment Companies
Chair: Patrick Weston, Route 2 Capital Partners
Created in 1958, the Small Business Investment Company (SBIC) Program has a long history of success helping small U.S. businesses access long-term, patient capital for growth and job creation. Administered by the U.S. Small Business Administration (SBA), the SBIC program utilizes the talent of experienced private investment fund managers to achieve critical public policy objectives. Fund management teams that successfully complete the application process may access low-cost leverage up to two times the private capital they raise. These funds then invest in a portfolio of U.S. small businesses – creating jobs, fostering innovation, and fueling economic growth. Today, there are more than 300 licensed SBIC funds representing more than $30 billion in domestic investment capital.
A 2017 Library of Congress study found that SBIC-backed small businesses created almost 3 million new jobs and supported an additional 6.5 million jobs over a 20-year period. Every one of these jobs represented a gain to the communities where they are located and to the broader regions from which they draw employees and provide goods and services. Moreover, these businesses have continued to succeed independently, growing into robust, sustainable mid-sized businesses that bring prosperity and employment to communities across the country. In fact, a number of small businesses that received SBIC investments in their early stages have grown into icons of American industry, including such household names as Federal Express, Apple, Intel, Costco, Tesla, Whole Foods, and Callaway Golf.
The SBIC program exemplifies a successful public-private partnership, matching federal funding with experienced private investors to support domestic small business growth at zero risk to the American taxpayer. SBIA works closely with the SBA and with members of Congress to ensure the vibrancy of the program continues, and that it expands to underserved areas. Members of SBIA participate in industry councils for sector-specific updates on policy and regulatory matters and educational opportunities. The SBIC Council regularly convenes to discuss relevant issues and often participates in forums and discussions with SBIC program leaders at the SBA.