Obtaining Small Business Financing through an SBIC

The Small Business Investment Companies (SBIC) program was created specifically to help small businesses raise capital during times of critical growth when the small firm may not be able to obtain this essential financing elsewhere. To be eligible for SBIC financing through the government-backed Small Business Administration (SBA), your business must meet certain requirements, including:

  • Net worth of small company is less than $18 million
  • Net tax income for previous two years is $6 million or less
  • Presentation of business plan to SBIC that addresses operations, management, financial condition, and financial requirements.

To locate SBIC financing first check out the SBIC resources available on the Internet including the Small Business Administration’s (SBA’s) Guide for Entrepreneurs Seeking Financing which will detail specific SBIC financing and the eligibility requirements. Once you understand all this information then seek out a SBIC in your area by looking through the SBA’s SBIC Directory. Another good resource for information is provided by the National Association of Small Business Investment Companies (NASBIC) with their Step by Step Guide to SBIC Financing.

Remember, an essential step to obtaining SBIC financing for your small business is the business plan. A good business plan can give your business the edge it needs to obtain SBIC financing just as a poorly prepared business plan can ruin your chances for obtaining financing. The SBA also provides excellent information to help you with business plan preparation. A tutorial on business plan preparation and development and tips on how to use your business plan are available here. Business plan preparation is an essential step in small business development and cannot be overlooked. Below is an excerpt video from a popular DVD about business plan preparation.


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