The SBIC, who full name is the National Association of Small Business Investment Companies, or NASBIC, is a program offered through the SBA that has provided close billions of dollars of financing to close to 100,000 small businesses. These companies are venture capital firms that are licensed through the Small Business Administration (SBA) to provide loans or equity funding to small businesses. In general, most banks and private equity firms don’t have investments available in the range of about $250,000 to $5,000,000. However, it’s this specific range that the SBIC works to cover with their investments. Since many companies don’t qualify for funding through regular financial institutions, this can be a much better route to seek. Alternatively, some small businesses could seek out funding through a private equity placement, which is usually easier to obtain and doesn’t require as strict policies or as heavy financing, but private equity placements through Rule 506 of Regulation D of the Securities Act of 1933 are usually about $200,000 on average, and thus may not be enough for a some businesses.
In preparing to obtain funding through the SBIC, a company should first make sure that it is as financially efficient as possible. This can be accomplished through extensive streamlining and cleaning up the company expenses, including retraining or firing unproductive employees, seeking better (sometimes cheaper, but may not necessarily be) suppliers of goods or services, and in generally looking for new ways to save money all around the company. One invaluable way for a company to start going about this process is actually to start up a suggestion box, which can help it spot weaknesses all throughout its structure.
Posted in 
Tags: 