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Frequently Asked Questions
Frequently Asked Questions
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Glossary What is SCOR?
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Small Business Investment Companies Small Business Investment Companies are private for profit concerns permitted under the Small Business Investment Act of 1958. They are designed to provide financial resources to existing small businesses and prospective entrepreneurs. All SBICs that fall under the Act are licensed, regulated and partially funded by the Small Business Administration. There are some 400 SBICs in the country. SBICs will invest in equity, make loans or buy bonds. However, debt is their preferred investment form because many SBIC borrow from the government and relend to small businesses. They need the interest and principle payments debt financing produces to repay the government. SBICs prefer to finance companies with at least a six month history and will finance only firms with what are considered promising futures. However, because they are funding with debt, those companies do not have to be the superstars venture capital companies need. A subset of SBICs are Minority Enterprise Small Business Investment companies, which specialize in helping minorities start a new business or to acquire an existing operation. Like SBICs, most are licensed and regulated by the Small Business Administration. There are about 125 in existence in the country. Stewart-Gordon Associates, Inc. Copyright © 2000 by Stewart-Gordon Associates, Inc., Dallas, Texas,
all rights reserved.
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