May 3, 2012
In connection with the United States Small Business Administration’s (SBA)
commitment of up to $1 billion in available leverage to Early Stage SBIC funds
over a five-year period, SBA has issued a call notice for Early Stage fund
managers interested in forming a Small Business Investment Company fund to be
licensed as an Early Stage SBIC fund.
To expeditiously license qualified applicants that have raised the requisite
capital for an Early Stage SBIC license, SBA has divided applicants into two
tracks based on applicants’ committed capital. Track 1 will apply to applicants
with signed commitments for at least $15 million in Regulatory Capital and with
“soft-circled” commitments for the remaining capital needed to reach the minimum
of $20 million in Regulatory Capital. Track 2 will apply to all other
The question and answer period for all applicants ends on May 18, 2012.
Thereafter, Tracks 1 and 2 diverge. Management Assessment Questionnaires (MAQs)
for Track 1 applicants are due no later than May 25, 2012. SBA expects to invite
qualified Track 1 applicants for interviews between June 6, 2012, and June 13,
2012. Green Light letters will be issued no later than June 29, 2012. Track 1
applicants will be required to submit full license applications to SBA no later
than July 30, 2012, and licensing decisions will be made no later than Sept. 28,
Track 2 applicants must submit their MAQs to SBA no later than June 19, 2012.
Thereafter, qualified applicants will be invited for interviews with SBA to be
held between July 23, 2012, and Aug. 3, 2012. Green Light letters will be issued
by Sept. 28, 2012. License applications are due no later than May 15, 2013, and
licensing decisions will be made no later than Sept. 30, 2013.
In the case of both Track 1 and 2 applicants, license applications must be
submitted with at least $20 million in committed Regulatory Capital.
The private equity practice group at McGuireWoods LLP is dedicated to keeping
clients advised of new legislative and business developments as they occur. If
you have any questions regarding these issues, please feel free to contact the authors.