A growth capital program run by the Small Business Administration (SBA) broke a record in fiscal year 2010, providing more financing to small businesses than in any prior year in the program's 50-year history.
The SBA's Small Business Investment Company (SBIC) debenture program provided a total of $1.59 billion in financing in FY2010, marking a 23% increase over the average $1.29 billion in financing offered in the four previous years. The increase was largely credited to changes made under the American Recovery and Reinvestment Act (ARRA), which was passed in February 2009.
"At a time when access to capital was tight, including from the traditional sources for growth capital, SBA helped fill some of that gap with a record amount of financing through our SBIC program," said SBA Administrator Karen Mills. "Across the country, there are small business owners and entrepreneurs who are well-positioned to take that next step, grow their business and create good-paying jobs."
SBICs are privately-owned and managed investment firms that are licensed and regulated by the SBA. The ARRA eased the rules governing SBIC licenses and decreased license processing times, leading to a boon in the program, which in turn led to more financing. Figures from FY2010 showed that 21 new SBIC licenses were issued, marking a 130% increase over the average 10 licenses per year. Additionally, license processing times fell by 60% from an average of 14.6 months in 2009 to just 5.8 months in 2010.
"Our efforts to strengthen our program efficiency and increase funding available through the SBIC program has provided another critical tool to help these small businesses get the capital they need and drive economic growth," Mills added.
The SBIC program was created in 1958. To learn more, go to www.sba.gov/INV.
Jacob Barron, NACM staff writer