VCs Tap New Funding Source
July 1, 2001
The SBIC Equity Leverage Program and the Reasons for its Growing Popularity
Venture Capital Journal
Since implementation in 1994 of a substantially improved small business investment company program, the number of privately-managed small business investment companies receiving reasonably-prices, government-backed financing has increased rapidly. In the federal fiscal year ended Sept. 30, 2000 alone, SBICs invested nearly $5.5 billion in over 3,000 businesses. This represents an increase of 30% over the prior year, due primarily to the growing popularity of the Small Business Administration's equity leverage program. Not only have the levels of government-backed funding for program participants increased dramatically, but at the same time those funding levels have become more reliable by becoming less dependent on Congressional budget appropriations.