This Community Developments Insights report describes the U.S. Small Business Administration’s (SBA) Small Business Investment Company (SBIC) program, its role in capital markets, and how financial institutions—including national banks and federal savings associations (collectively, banks)—can use the program to expand their small-business finance activities. This report also describes how the SBA licenses these companies, how they operate and are supervised, and the guidelines they should follow. Finally, this report outlines risks and regulatory considerations of bank investments in SBICs and explains how these investments may receive consideration under the Community Reinvestment Act (CRA).
The information in this report was obtained from a variety of sources, including bankers, non-supervised nancial intermediaries, SBICs’ general partners (GP), trade groups, the SBA’s Of ce of Investment and Innovation (OII), and other parties involved with small business investment companies. Appendix E provides a resource directory for additional program information.