Simple English definitions for legal terms
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A small-business investment company is a type of corporation that helps small businesses by providing them with long-term equity capital. This is done under the Small Business Investment Act and is regulated by the Small Business Administration. It is often abbreviated as SBIC.
A Small-Business Investment Company (SBIC) is a type of corporation that is established under state law to provide long-term equity capital to small businesses. This is done in accordance with the Small Business Investment Act and is regulated by the Small Business Administration.
For example, let's say a small business needs funding to expand its operations. The business can approach an SBIC for long-term equity capital. The SBIC will then invest in the business in exchange for an ownership stake. This allows the small business to access the funding it needs to grow, while the SBIC benefits from any future profits.
Another example is a startup that needs funding to develop a new product. The SBIC can provide the necessary capital to help the startup bring its product to market. In return, the SBIC will receive an ownership stake in the startup.
Overall, SBICs play an important role in providing funding to small businesses that may not have access to traditional sources of financing. By investing in these businesses, SBICs help to stimulate economic growth and create jobs.