The Small Business Investor Alliance (SBIA), the leading association for lower middle-market private equity funds and investors, today announced that Small Business Investment Companies (SBICs) invested $5.4 billion in FY 2014.  This represents a 54% increase from the previous record set in FY 2013 of $3.2 billion and more than two and half times the amount of investments made in FY 2010.  SBIC funds currently have in excess of $20 billion in assets under management.
 
SBIC funds are highly regulated private equity funds that invest exclusively in domestic small businesses.  SBICs have existed since the 1958 and have grown dramatically since the financial crisis, filling critical capital access gaps in the lower middle market.  SBICs can provide debt, equity, or both to small businesses. Many, but not all, SBIC funds access low cost leverage facilitated by the Small Business Administration to increase the amount of capital available for investment.  SBIC funds accessed $2 billion in leverage in FY 2014. SBIC leverage operates at a zero subsidy rate (no cost to taxpayers). 
 
“The SBIC program is the rare example of a smart, market-based program that enables billions of dollars of private investment to reach growing small businesses. Without SBICs thousands of businesses would not be able to access the capital needed to grow, innovate and increase employment.” said Charles McCusker, founder of Patriot Capital and Chair of SBIA’s board.
 
“Many SBIC-backed businesses have grown from small businesses into icons of American industry and innovation including: Federal Express, Tesla, Intel, Pandora, Apple Computer, Costco and many others. Increasing small business investment is a promising sign for the next generation of American businesses and for our economic future.” said Brett Palmer, President of the SBIA. 
 
The Small Business Investor Alliance (SBIA) is the premier organization of lower middle-market private equity funds and investors. SBIA works on behalf of its members as a tireless advocate for policies that promote competitive markets and robust domestic investment for growing small businesses. SBIA has been playing a pivotal role in promoting the growth and vitality of the private equity industry for more than 50 years.