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SBA Loans From A to Z

SBICs and SSBICs

The SBA also licenses for-profit intermediaries, known as Small Business Investment Companies (SBICs). SBICs are privately owned venture-capital firms that invest their own capital, along with money they've borrowed at favorable rates from the government. If you think working with venture-capital investors will get your business off the ground--and you don't mind giving up some equity--ask about SBICs. In addition to helping you finance your business, some SBICs also offer management services. Because they take a vested interest in companies they invest in, they look at everything from inventory to cost control, hiring practices and location. Some SBICs only lend in industries they know; others will lend across the board.

Your head may be swimming now with all these acronyms, but you should also know about Specialized Small Business Investment Companies (SSBICs), which serve socially and economically disadvantaged entrepreneurs by investing in companies owned in economically depressed areas, and those owned by women and minorities.

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This article was originally published in the August 1997 print edition of Entrepreneur with the headline: SBA Loans From A to Z.

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