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Investment capital | U.S. Small Business Administration

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class="usa-breadcrumb__list-item usa-current" aria-current="page"> <span>Investment capital</span> </li> </ol> </nav> </div> </div> <div class=""> <div data-drupal-messages-fallback class="hidden"></div> </div> <div class="grid-row "> </div> <div class="sba-layout-docs sba-layout-docs--sidebar"> <div class="layout-sidebar-first"> <nav aria-labelledby="sidebar-menu-navigation"> <h2 class="visually-hidden" id="sidebar-menu-navigation">Section navigation</h2> <ul class="usa-sidenav"> <li class="usa-sidenav__item first"> <a href="/funding-programs/loans"> <span>Loans</span> </a> </li> <li class="usa-sidenav__item expanded dropdown active active-trail"> <a class="usa-current" href="/funding-programs/investment-capital"> <span>Investment capital</span> </a> <ul class="usa-sidenav__sublist"> <li class="usa-sidenav__item first last"> <a href="/funding-programs/investment-capital/sbic-directory"> <span>SBIC directory</span> </a> </li> </ul> </li> <li class="usa-sidenav__item"> <a href="/funding-programs/disaster-assistance"> <span>Disaster assistance</span> </a> </li> <li class="usa-sidenav__item"> <a href="/funding-programs/surety-bonds"> <span>Surety bonds</span> </a> </li> <li class="usa-sidenav__item last"> <a href="/funding-programs/grants"> <span>Grants</span> </a> </li> </ul> </nav> </div> <div class="usa-layout-docs__main"> <h1 data-test="title" > <span>Investment capital</span> </h1> <div id="block-sba-content" class="block block-system block-system-main-block"> <article class="basic-page"> <div> <div class="basic-page__summary" data-test="pageSummary"> Find an investor for your business from among more than 300 Small Business Investment Companies (SBICs) licensed by SBA. </div> <div class="sba-toc sba-standard-margin-spacing"> <hr class="sba-toc__divider-first sba-standard-margin-spacing" role="presentation"> <h2 id="sba-toc-heading" class="sba-toc__heading js-toc-ignore">Content</h2> <nav id="sba-toc__nav" aria-labelledby="sba-toc-heading" class="sba_toc__nav sba-standard-margin-spacing"></nav> <hr role="presentation"> </div> <div class="sba-section-headings"> <h2 class="sba-section-headings" id="sbics-invest-in-small-businesses"> SBICs invest in small businesses</h2> </div> <div class="paragraph paragraph--type--text-section paragraph--view-mode--default sba-standard-margin-spacing"> <div class="usa-prose field__item" data-test="fieldItem"><p>An SBIC&nbsp;is a privately owned company that鈥檚 licensed and regulated by the SBA. SBICs invest in small businesses in the form of debt and equity. The SBA doesn鈥檛 invest directly into small businesses, but it does provide funding to qualified SBICs with expertise in certain sectors or industries. Those SBICs then use their private funds, along with SBA-guaranteed funding, to invest in small businesses.</p> </div> </div> <section class="sba-image-collection sba-standard-margin-spacing sba-columns--2"> <div class="sba-image-collection__image"> <figure class="sba-image-collection__image-wrapper"> <div> <img loading="lazy" src="/sites/default/files/styles/image_collection/public/2024-03/FP%20Investment%20capital%20-%20ENG%202024.jpg.webp?itok=CvuLh-2s" width="1400" height="1564" alt="Private investors can participate with limited funds, but SBA lends up to 2 times privately raised funds to small businesses and startups through SBIC investments." /> </div> </figure> </div> </section> <div class="sba-section-headings"> <h2 class="sba-section-headings" id="what-you-can-get"> What you can get</h2> </div> <div class="paragraph paragraph--type--text-section paragraph--view-mode--default sba-standard-margin-spacing"> <div class="usa-prose field__item" data-test="fieldItem"><p>SBICs invest in small businesses through debt, equity, or a combination of both. Debt is a loan an SBIC gives to a business, which the business must pay back, along with any interest. Equity is a share of ownership an SBIC gets in a business in exchange for providing funding.&nbsp;Sometimes, an SBIC invests in a business through both debt and equity. Such an investment includes both loans and shares of ownership. A typical SBIC&nbsp;investment is made over a 3-year period.</p> </div> </div> <section style="--background-color: #ffffff" class="sba-card-collection sba-standard-margin-spacing sba-columns--3 padding-y-0" > <ul class="usa-card-group sba-columns--3"> <li class="usa-card"> <div class="usa-card__container"> <header class="usa-card__header"> <h2 class="usa-card__heading">Debt</h2> </header> <div class="usa-card__body"> A typical SBIC loan ranges from $250,000 to $10 million, with an interest rate between 9% and 16%. </div> </div> </li> <li class="usa-card"> <div class="usa-card__container"> <header class="usa-card__header"> <h2 class="usa-card__heading">Equity</h2> </header> <div class="usa-card__body"> SBICs will invest in your business in exchange for a share of ownership in your company. Typical investments range from $100,000 to $5 million. </div> </div> </li> <li class="usa-card"> <div class="usa-card__container"> <header class="usa-card__header"> <h2 class="usa-card__heading">Debt with equity</h2> </header> <div class="usa-card__body"> Financing includes loans and ownership shares. Loan interest rates are typically between 10% and 14%. Investments range from $250,000 to $10 million. </div> </div> </li> </ul> </section> <div class="sba-section-headings"> <h2 class="sba-section-headings" id="check-your-eligibility"> Check your eligibility</h2> </div> <div class="paragraph paragraph--type--text-section paragraph--view-mode--default sba-standard-margin-spacing"> <div class="usa-prose field__item" data-test="fieldItem"><p>SBICs typically target mature, profitable businesses with sufficient cashflow to pay interest. However, each SBIC has its own investment profile in terms of targeted industry, geography, company maturity, and the types and size of financing they provide. There are a few universal requirements.</p> </div> </div> <section style="--background-color: #ffffff" class="sba-card-collection sba-standard-margin-spacing sba-columns--3 padding-y-0" > <ul class="usa-card-group sba-columns--3"> <li class="usa-card"> <div class="usa-card__container"> <header class="usa-card__header"> <h2 class="usa-card__heading">Be a U.S. business</h2> </header> <div class="usa-card__media"> <div class="usa-card__img"> <div> <img loading="lazy" src="/sites/default/files/styles/card/public/2018-04/FP%20Investment%20capital-04.png.webp?itok=uSAPklCt" width="500" height="280" alt="A U.S. flag over an image of the country." /> </div> </div> </div> <div class="usa-card__body"> At least 51% of your employees and assets must be within the U.S. </div> </div> </li> <li class="usa-card"> <div class="usa-card__container"> <header class="usa-card__header"> <h2 class="usa-card__heading">Be a small business</h2> </header> <div class="usa-card__media"> <div class="usa-card__img"> <div> <img loading="lazy" src="/sites/default/files/styles/card/public/2018-04/FP%20Investment%20capital-02.png.webp?itok=fbrGyMxk" width="500" height="280" alt="A storefront." /> </div> </div> </div> <div class="usa-card__body"> Qualify as a small business according to SBA size standards. </div> </div> </li> <li class="usa-card"> <div class="usa-card__container"> <header class="usa-card__header"> <h2 class="usa-card__heading">Be in an approved industry</h2> </header> <div class="usa-card__media"> <div class="usa-card__img"> <div> <img loading="lazy" src="/sites/default/files/styles/card/public/2018-04/FP%20Investment%20capital-03.png.webp?itok=2vJsxUn_" width="500" height="280" alt="A movie camera, a wind turbine, and a heart." /> </div> </div> </div> <div class="usa-card__body"> Farmland, real estate, and financing are some of the industries that don鈥檛 qualify. </div> </div> </li> </ul> </section> <div class="sba-section-headings"> <h2 class="sba-section-headings" id="find-an-investor"> Find an investor</h2> </div> <div class="paragraph paragraph--type--text-section paragraph--view-mode--default sba-standard-margin-spacing"> <div class="usa-prose field__item" data-test="fieldItem"><p>If your small business is&nbsp;interested in&nbsp;SBIC financing, take the following steps when you approach an SBIC.</p> </div> </div> <section style="--background-color: #ffffff" class="sba-card-collection sba-standard-margin-spacing sba-columns--3 padding-y-0" > <ul class="usa-card-group sba-columns--3"> <li class="usa-card"> <div class="usa-card__container"> <header class="usa-card__header"> <h2 class="usa-card__heading">1. Research an SBIC</h2> </header> <div class="usa-card__media"> <div class="usa-card__img"> <div> <img loading="lazy" src="/sites/default/files/styles/card/public/2017-04/SBIC_Research.jpg.webp?itok=64jp8Vqk" width="500" height="280" alt="A man researching an SBIC on his laptop." /> </div> </div> </div> <div class="usa-card__body"> Find an SBIC using our online directory, and make sure they鈥檙e actively investing in businesses in your region, size, and industry. </div> </div> </li> <li class="usa-card"> <div class="usa-card__container"> <header class="usa-card__header"> <h2 class="usa-card__heading">2. Prepare your business plan</h2> </header> <div class="usa-card__media"> <div class="usa-card__img"> <div> <img loading="lazy" src="/sites/default/files/styles/card/public/2017-04/SBIC_Prepare_Business_Plan.jpg.webp?itok=-qAMFkf4" width="500" height="280" alt="A woman practicing her business pitch." /> </div> </div> </div> <div class="usa-card__body"> Get ready to make the case that investing in your business would be profitable for the SBIC. </div> </div> </li> <li class="usa-card"> <div class="usa-card__container"> <header class="usa-card__header"> <h2 class="usa-card__heading">3. Contact an SBIC</h2> </header> <div class="usa-card__media"> <div class="usa-card__img"> <div> <img loading="lazy" src="/sites/default/files/styles/card/public/2017-04/SBIC_Contact.jpg.webp?itok=iPFWpciN" width="500" height="280" alt="Business professionals having a conversation." /> </div> </div> </div> <div class="usa-card__body"> For the best chance to get financing, use your network. Talk to accountants, attorneys, and executives to get an introduction to an SBIC. </div> </div> </li> </ul> </section> <div class="sba-paragraph-button sba-standard-margin-spacing"> <a class="usa-button usa-button--big sba-paragraph-button__button display-inline-block" href="/funding-programs/investment-capital/sbic-directory"> Find an SBIC </a> </div> <section id="block-counselormatchcta" class="sba-call-to-action sba-standard-margin-spacing padding-y-0" style="background-color:#ffffff"> <div class="sba-call-to-action__inner"> <div class="sba-call-to-action__content left dark short"> <h3>Need help? 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