In a Q&A published by the Nashville Post, Bass, Berry & Sims attorney Bryan Bylica shared insight on the Small Business Investment Company (SBIC) and Rural Business Investment Company (RBIC) programs. Bryan leads the firm’s Investment Funds Practice and is one of only a handful of lawyers nationwide that represents SBIC and RBIC funds throughout the licensing process and in post-licensing regulatory and compliance matters.
“The SBIC program enables private equity fund managers to access government leverage at rates typically lower than traditional lending sources to enable SBIC funds to make investments in ‘small businesses’ as defined by the Small Business Administration (SBA),” Bryan said. “The goal of the SBIC program is to grow small businesses by facilitating the access to growth capital for these lower- middle-market companies in a way that promotes job growth and stability for these businesses.”
In answering questions related to the SBIC program, Bryan details what types of qualities the SBA seeks for in program investors, which include experience making investment decisions and a proven track record. In addition to detailing the SBIC licensing process, Bryan highlights the benefits of participating in the program, including access to long-term financing through securities sold in the public market and guaranteed by the U.S. government. SBIC funds can obtain long-term leveraged funds at favorable interest rates in order to fund loans to, and investments in, qualifying small business.
The RBIC program is managed by the U.S. Department of Agriculture (USDA) with the goal of facilitating the availability to investment capital to small businesses and smaller enterprises located in rural communities. The RBIC licensing process and USDA’s preferred qualities for investors are very similar to those of the SBIC program. However, RBIC funds are not currently eligible for leverage, although they are often an attractive investment option for Farm Credit institutions.
The full article, “Q&A: Bryan Bylica of Bass, Berry & Sims – Lawyer Discusses SBIC, RBIC Partnership Programs,” was published by the Nashville Post on August 22 and is available online (subscription required).