2008 Fiscal Year End Numbers Indicate Growth among Debenture SBICs

October 22, 2008

In 2008 Small Business Investment Companies (SBICs) organized as Debenture SBICs continued to grow. On October 1, 2008, the Data Management Branch of the Small Business Administration’s (SBA) Investment Division released its fiscal year end data for the SBIC Program. The data showed that despite the current uncertainties in the financial markets, the Debenture SBIC Program still grew significantly.

During 2008, 1,905 small businesses received financing through the SBIC Program, including 1,890 financings by SBICs Debenture Licensees. These financings represent a 12.9% increase in volume over 2007 fiscal year financing volume. The total dollars invested increased 12.4% over 2007 total dollars invested to nearly $1.44 billion with the average SBIC Debenture Licensees being $759,943.

The SBA has 129 active Debenture SBIC Licensees, which have raised more than $3.9 billion in private capital. The amount of the SBA’s outstanding leverage increased, growing approximately 22.5% to nearly $2.6 billion from $2.1 billion in fiscal year 2007. The amount of Total Capital Resources and Total Committed Capital Resources increased, with 13.6% and 15.6% respectively. At the SBA’s 2008 fiscal year end, Total Capital Resources closed at $5.79 billion, while Total Committed Capital Resources closed at $6.99 billion.

The Private Equity Practice at McGuireWoods LLP is dedicated to keeping our clients advised of new legislative and business developments as they occur. If you have any questions regarding these issues, please feel free to contact your primary attorney at McGuireWoods LLP or you may contact the authors. You may also access our Fall 2008 webinar series, which included The State of the SBIC Program with Lee Mercer, NASBIC Chairman, and NASBIC President Steve Vivian, First Time SBIC Funds: A Guide to the SBIC Licensing Process with Geoff Cockrell and Mark Kromkowski of McGuireWoods, and Private Equity Fundraising: Current Market Trends with Mark O’Hare of PREQIN.

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