Pre-screening

In an effort to help prospective SBIC applicants become more familiar with the qualifications required of SBIC Licensees and to gauge their own fit with the program, the Investment Division makes available a "pre-screening" process.  Investment Officers with the Office of Program Development hold calls with interested parties to give them non-binding feedback on their qualifications for the SBIC Program.

If you have would like an opportunity to speak with Program Development about your qualifications prior to filing a Management Assessment Questionnaire (MAQ), please e-mail an Executive Summary to SBIC@sba.gov.  An Investment Officer will then be in touch to set-up a phone call with you and your team.

Please Note: Before preparing or submitting an Executive Summary, review the following F.A.Q.s as well as the content of our website.  The screening calls are productive only for those applicants who have carefully evaluated their own fit with the program and whether they meet the qualifications criteria required of all SBIC Licensees.

FAQ: What management team characteristics and investment styles fit best with the debenture program?

The experience of the Investment Division indicates that highly successful SBICs have historically had management teams with:

• At least two Principals with substantive and analogous principal investment experience
• Realized track record of superior returns, based on an overall evaluation of appropriate quantitative and qualitative measures
• Evidence of strong deal flow in the investment area proposed for the new fund
• Cohesive management team, with complementary skills and history of working together
• Managerial, operational or technical expertise that can add value at the portfolio company level
• A demonstrated ability to manage cash flows so as to provide assurance that the SBA will be repaid on a timely basis.  Funds focused on providing later stage, expansion capital to cash-flow positive or nearly cash-flow-positive companies are the best fit for the regular debenture program.

FAQ: What regulatory considerations should I make before preparing an Executive Summary?

It is important to familiarize yourself with all of the regulations and requirements to ensure that you can operate your fund comfortably in compliance with these regulations.

• Refer to the Regulations section of our website to review Part 107 and Part 121 of SBIC regulations.  Pay particular attention to 121.301(c) as well as 121.101 through 121.103, which relate to the size requirements for SBIC portfolio companies.  When reading these sections of the regulations, assure yourself that the companies you want to finance will indeed fall within these size and other eligibility standards of the program.
• Read the definition of "Associate" carefully in 107.50 and also read 107.730 regarding conflicts-of-interest.  Think through all of your relationships with any affiliates to ensure that there are not likely to be any organizational problems or potential conflicts between your SBIC and any related entities.
• Carefully read all of Subpart G of Part 107 that relates to qualifying and structure investments to be certain that any unique deal structure that you may utilize will comply with SBIC regulations.
• Review 107.150 carefully to determine if there will be sufficient independence of management from investors ("management ownership diversity").
• As a participant in a government program, you will be required to file regular reports that would not otherwise be required if you were solely a private fund.  Your team must be able to and willing to comply with SBA regulations governing the SBIC program.  Review the operations forms and talk to existing licensed SBICs to better understand the cost and allocation of additional resources associated with these regulatory filings.

FAQ: What should the Executive Summary include?

Please note that in order to provide substantive feedback, we need the following:

• A written summary of the principals’ backgrounds

• Description of the proposed fund strategy

• A table containing information about each principal's investment track record, like the one shown below:

Please compress large files.  Program Development will not assess Executive Summaries that do not include the aformentioned track record information.

If you have any questions, please refer to the Contact Us section of our website.