Accession Number : ADA322416

Title :   Small Business: Update of Information on SBA's Small Business Investment Company Programs.

Corporate Author : GENERAL ACCOUNTING OFFICE WASHINGTON DC RESOURCES COMMUNITY AND ECONOMIC DEVE LOPMENT DIV

PDF Url : ADA322416

Report Date : FEB 1997

Pagination or Media Count : 29

Abstract : The Small Business Investment Act of 1958 created a program to help small businesses obtain financing for starting, maintaining, and expanding operations. Under the program, Small Business Investment Companies (SBIC) provide funding to small businesses through equity investments and debt. In 1972, the Congress amended the act to establish Specialized SBICs, called SSBICs, to provide funding to small businesses owned by socially or economically disadvantaged individuals. In addition to using their own private capital to support small businesses, SBICs and SSBICs can also obtain funds by issuing debentures or participating securities, which the Small Business Administration (SBA) pools and sells to the public. The principal and interest on both of these instruments are guaranteed by SBA. Until November 1989, SSBICs could sell to SBA stock carrying a 3% annual dividend (generally referred to as 3% preferred stock), and until October 1995, they could also sell stock to SBA carrying a 4% annual dividend. SBA refers to the financial assistance that SBICs and SSBICs receive as leverage. In May 1995, we reported on the performance of the programs and investment activities for fiscal years 1990 through 1994. Because of your interest in the SBIC and SSBIC programs, you requested that we update through fiscal year 1996 selected information presented in that report. As agreed with your office this report provides information on (1) the programs' trends for fiscal years 1990 through 1996 in terms of the number, size, funding, and private capitalization of SBICs and SSBICs; (2) SBA's cumulative net program losses through fiscal year 1996 from liquidating SBICs and SSBICs, and SSBICs' participation in the 3% Preferred Stock Repurchase Program through December 1996

Descriptors :   *COMMERCE, *FINANCIAL MANAGEMENT, CONGRESS, MANAGEMENT PLANNING AND CONTROL, MARKETING, INVESTMENTS, ECONOMIC IMPACT, COST MODELS, AUDITING, REVENUE SHARING.

Subject Categories : Economics and Cost Analysis

Distribution Statement : APPROVED FOR PUBLIC RELEASE