More than a dozen private funds invest $2.8 billion in more than 1,000 important technology startups and small businesses
WASHINGTON, Oct. 22, 2024 (GLOBE NEWSWIRE) — Today, Secretary Isabel Casillas Guzman, Director of the U.S. Small Business Administration (SBA), and Secretary Lloyd J. Austin, Secretary of the U.S. Secretary of Defense (Department of Defense), 13, funds approved to be authorized by the SBA under the Small Business Investment Company Critical Technology Initiative (SBICCT). It is a joint initiative between the Department of Defense and the SBA to attract and expand private investment in technology areas critical to our economy and national security, made possible by the SBA’s historic modernization efforts. The Small Business Investment Company (SBIC) program under the Biden-Harris administration created a new SBA government-backed loan called Accrual Bonds for private investment funds. Together, the 12 companies managing 13 funds will match SBA-guaranteed loans to invest in more than 1,000 innovative startups and small businesses developing technologies ranging from advanced materials to space and hypersonic technology. The plan is to raise $2.8 billion in private capital.
“SBA and the Department of Defense launched this historic effort to leverage SBA’s long-standing SBIC program and its recent transformation to ensure the United States remains globally competitive in critical technologies. ” said SBA Secretary Guzman. “These strong early results and expanded investor network will provide U.S. innovators, producers, and supply chains with the critical funding they need to meet challenges and advance national and economic security. I guess.”
“This first group of funds from the SBICCT initiative will build lasting advantage by benefiting supply chain growth and modernization, strengthening the economy and national security, and developing and commercializing critical technologies. “This is an important milestone in demonstrating the power of public-private partnerships that are an important driver of America’s industrial base,” said Heidi Shu, Under Secretary of Defense for Research and Engineering. “I am proud of our collaborative efforts with our colleagues at the Office of Strategic Capital (OSC) and SBA OII to launch and advance this important program.”
Funds chartered by the SBA under the SBICCT Initiative are eligible for SBA-guaranteed loans intended to enhance fund-level investment returns. Licensees have access to up to $175 million in SBA bond loans through the SBIC program. The new Accrual corporate bond loan fits into an equity-oriented investment strategy that tends to invest in longer-term cash flows and innovative new technologies, while the long-standing SBA standard corporate bond fits into a credit strategy. Through the SBICCT initiative, licensed funds will also have access to program-related initiatives and benefits offered by the Department of Defense designed to increase the value of each licensee’s fund investment portfolio.
The SBICCT initiative was announced in December 2022 by Secretary of Defense Lloyd Austin and SBA Secretary Isabel Guzman. Through this first-of-its-kind partnership, the Department of Defense’s Office of Strategic Capital (OSC) and SBA’s Office of Investments and Innovation (OII) are partnering with increase private investment in new technologies.
The SBICCT Initiative has been officially launched and will begin accepting SBIC applications in fall 2023. More than 100 funds have expressed interest in the initiative, and since its formal launch, 22 companies have submitted formal applications and taken significant steps to undergo a rigorous underwriting and due diligence process. . .
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In early July 2024, the SBA awarded the first SBICCT Initiative license. As of October 22, 2024, just three months later, a total of 13 funds within the “Green Light” approval have raised private capital and are expected to receive approval from the SBA. This funding spans all 14 of the Department of Defense’s critical technology areas, as well as component-level technology and production processes. These represent all parts of the capital stack across each stage of investment, from seed-stage ventures to late-stage buyouts, and from venture debt to special situation credits.
Interest in the SBICCT initiative continues to grow, and additional applications are expected in future quarterly application periods. The next submission deadline is November 15, 2024. For more information about the SBICCT initiative and the application process, please see our Investment Policy Statement.
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About SBA’s Office of Investment and Innovation (OII)
The U.S. Small Business Administration (SBA) Office of Investment and Innovation (OII) provides financial capital, networks, support, and research and development funding to America’s growth-oriented small business and startup communities to develop commercially viable innovations. We are leading programs that provide access. Our work is supported by public-private partnerships, helping small and medium-sized businesses on their way from idea to IPO. For more information, please visit OII on the SBA.gov website.
About the U.S. Small Business Administration
The U.S. Small Business Administration helps advance the American dream of business ownership. As the single go-to resource and voice for small businesses backed by the power of the federal government, the SBA helps entrepreneurs and small business owners start, grow, and expand their businesses, and recover from recessions. We will provide you with the resources and support you need. declared a disaster. We provide services through an extensive network of SBA field offices and partnerships with public and private organizations. For more information, please visit www.sba.gov.
Contact: Christine Saah Nazer U.S. Small Business Administration (202) 756-0304 Christine.saahnazer@sba.gov
