Rebirth of a Vital Urban Neighborhood

The Small Business Investment Company (SBIC) program fills the gap between the availability of venture capital and the needs of small businesses that are either starting or growing. Licensed and regulated by the Small Business Administration (SBA), SBICs are privately owned and managed investment firms that make capital available to small businesses through investments or loans. They use their own funds plus funds obtained at favorable rates with SBA guaranties and/or by selling their preferred stock to the SBA.

According to Joe Foglia, SBA district director for Arkansas, "SBA licensed 31 new SBICs in 1998 and helped to provide equity capitalto nearly 3,500 small businesses. In addition, SBA soon will introduce a New Market Venture Capital program to support $100 million in equity investments and $30 million in technical support for firms located in low-to-moderate income areas."

SBICs are for-profit firms whose incentive is to share in the success of a small business. In addition to equity capital and long-term loans, SBICs provide debt-equity investments and management assistance. The SBIC program provides funding to all types of manufacturing and service industries. Some investment companies specialize in certain fields, while others seek out small businesses with new products or services because of the strong growth potential. Most, however, consider a wide variety of investment opportunities.

According to the Community Reinvestment Act (CRA) regulation, a bank's investments in support of organizations promoting economic development by financing small businesses receive favorable consideration as a CRA-qualified investment. Such organizations include SBICs and specialized SBICs.

For information on the following upcoming SBIC workshops, call 1-800-734-9496:

• Kansas City, April 6
• New York, April 12
• Atlanta, May 6
• Dallas, May 17
• San Francisco, June 2