SBIC: How to apply

The first hurdle in the SBIC how to apply track is meeting the Small Business Administration’s definition of a small business. The SBA’s defines a company as small when its net worth is $18.0 million or less, and its average after tax net income for the preceding two years doesn’t exceed $6.0 million. The SBA determines if a business qualifies by considering all of the businesses parents, subsidiaries and affiliates.

Research SBIC Sources

Step one is to identify and research existing SBICs that may be interested in financing your company. To find one, call the SBA at 800-827-5722 or search their site at SBA or its online list of licensed SBICs for information about SBICs in your state. You can also contact the National Association of Small Business Investment Companies. Make your choices based on these factors: the types of investments the SBIC makes, how much money is available for investment now and in the future, and the types of management services offered. Research should begin long before you need for funding becomes critical since it will take time, so will the SBIC research into your business.

SBIC: How to Apply with a Business Plan

Your business plan must be detailed and provide the following information. When it comes to the plan, more detailed information is the key. Provide as much information as you think you need, then make additions to insure against your request being bounced back because of a lack of information.

Description of your business

The name of the business as it appears in the official records of your city, state principal location and any branch offices or facilities.

The type of business organization

If you have a corporation, the date and state of incorporation.

A description of the type of business performed, including the products sold or services rendered.

A history of the general development of the products and/or services during the past five years or since inception o the business should yours be a start-up.

Specs on your site and facility

Describe real and physical property and adaptability. Include technical attributes of production facilities.

Detailed marketing information

About your current customer base and the percentages of gross revenue generated by your five largest customers.

About potential customers. Include the types of marketing survey and/or economic feasibility study.

Description of the your products or services distribution system and any technical information concerning your production facilities.

ID the competition

Identify those businesses within your area and your ranking compared to them. Include larger and smaller competitors.

Profile Management

Provide brief resumes of yourself, your management personnel and principal owners, including ages, education, business experience. banking, business, and personal references.

Complete financial statements

Balance sheets, profit and loss statements for the last three fiscal years or from the time of your business's inception, detailed revenue and expense projections, and net earnings for the coming year.

Reasons why you need the funding

Include the amount of funding you’re requesting and a description of how you’ll use the funds and for how long.

Description of the benefits you expect to gain

Such as improvement in financial position, expense reduction, increase in efficiency, increased market penetration and profit margin increases.

While the SBIC how to apply learning curve may seem steep, the end results are well worth the effort.