Small-Business Investment Company Law and Legal Definition

Small-Business Investment Company (SBIC) is a corporation created under state law to provide long-term equity capital to small businesses, as provided under the Small Business Investment Act and regulated by the Small Business Administration. They are mostly privately owned and managed investment firms. These companies borrow funds at favorable rates through the Federal Government, and provide venture capital to small independent businesses, both new and already established. At present there are two types of SBICs - the original or regular SBICs and SSBICs - Specialized Small Business Investment Companies. One of the major incentives for SBICs to invest in small businesses is the chance to share in the success of the small business if it grows and prospers.