Summary: The Small Business Administration (SBA) formerly provided investment capital to Specialized Small Business Investment Companies (SSBIC) by purchasing their three-percent preferred stock. In 1989, Congress authorized SBA to allow SSBIC to repurchase that stock. Following a pilot program, SBA began allowing SSBIC to buy back their stock at 35 percent of the price paid by SBA. Accrued unpaid dividends were either forgiven or were written off over a five-year period. In May 1995, GAO reported (GAO/RCED-95-146FS) that 17 SSBIC had repurchased their stock under the program. Since then, another four of the current 90 SSBIC have repurchased their stock. This fact sheet provides information on each SSBIC participating in the stock repurchase program, including (1) the repurchase price paid, unpaid dividends forgiven or allowed to be amortized, and the method used to finance the repurchase; (2) the company's private capital, SBA financing, and capital impairment at the time of the stock repurchase; and (3) the company's investments in small businesses during the last five years and the value of the investment portfolio at the time of the company's most recent report to SBA.
