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Abstract: 

When changes in the banking laws a decade ago permitted banks directly to own more than 5 percent of the voting securities of businesses that were not related to banking, many banks that had previously formed Small Business Investment Companies (SBICs) surrendered their licenses. A number of banks are now again considering the formation of SBICs, because the Dodd-Frank Act permits bank investment in SBICs. Although SBICs provide a number of advantages, threshold issues deserve careful consideration.

Keywords: Start-Up America Initiative, leverage, Regulatory Capital, Debenture SBICs

Affiliations:  1: Pepper Hamilton LLP.