The Pre-Screening Process

Prospective applicants to the SBIC Program have the opportunity to participate in a “pre-screening” process designed to help them assess their fit with the program.  After submitting an “Executive Summary” (described below) that outlines their SBIC fund proposal, fund managers obtain direct feedback from the SBA Investment Officers responsible for evaluating new applications.  The feedback is non-binding and every new applicant to the SBIC program is entitled to a full review of their qualifications, but pre-screening discussions often yield time-saving feedback.

How to Participate:

  1. Review the FAQs and the SBIC Program webpage:  Please review the FAQs below as well as the information available on the SBIC Program webpage (  Screening calls are productive only for those applicants that come prepared with an understanding of how the SBIC program works.
  2. Submit an Executive Summary: Read the instructions below on how to prepare an effective “Executive Summary” memorandum.  Incomplete submissions will not be reviewed.  Send your Executive Summary to with the subject line: “Pre-Screening Request: [FUND NAME]”.
  3. Schedule a Call: Upon receipt of your Executive Summary, the Investment Division’s Office of Program Development will be in touch to schedule a call.  An Investment Officer will usually schedule the call within a week or two.
  4. Pre-Screening Call: Each pre-screening call will be scheduled for 30 minutes, during which the Investment Officer will provide feedback on the Executive Summary and answer any questions the fund managers may have.


FAQ: What management team characteristics and investment styles fit best with the debenture program?

Investment Style Characteristics:

Successful SBIC applicants must propose investment strategies that are compatible with the license type they are pursuing.  Further, applicants must demonstrate an investment track record with the following characteristics:

  • The track record contains investments that are analogous to the types of investments that are proposed for the SBIC with regard to size, stage, structure, sector, or any other key variables.
  • The track record contains a meaningful number of full, positive realizations that have been achieved within the past ten years.
  • The overall performance of the track record is strong on an absolute and relative basis across multiple investment cycles.
  • The track record must demonstrate an ability to generate the level of liquidity that would be needed to service SBA-guaranteed debt.  

Please note that in order to include a deal in your track record, you must have (i) served on the Investment/Credit Committee that approved the transaction OR (ii) led the due diligence, structuring, Investment Committee presentation AND the post-close monitoring of the investment for a meaningful period of time.

Management Team Characteristics:

In addition to track record, SBA considers the broader qualifications of the applicant’s fund management team.  Successful teams have the following characteristics:

  • At least two team members have track records that meet the requirements discussed above.
  • The team members have a history of working together and form a cohesive unit.
  • The fund managers bring complementary skill sets relevant to the proposed investment strategy.
  • The structure and economics of the proposed SBIC creates an alignment of incentives between the management team and their investors, as well as among the members of the management team themselves.


FAQ: What are some of the common reasons applicants are unsuccessful in the SBIC application process?

Unsuccessful proposals often suffer from one, or more, of the following deficiencies:

  • Only one member of the team member has a qualifying investment track record.
  • A member of the team improperly claims credit for deals he/she did not lead or vote on as a member of an Investment/Credit committee.
  • The team’s investment experience is not analogous to the proposed SBIC strategy.
  • Track records show poor fund performance in terms of return metrics, volatility or loss rates.
  • Track records do not provide evidence of an ability to generate current income and manage the liquidity required to service SBA-guaranteed debt.


FAQ: What regulatory considerations should I make before preparing an Executive Summary?

The regulations governing permissible investments can generally be summarized as follows:

SBICs must invest:

  • 75% of total capital in U.S. small businesses[1], defined as having the following:
  • No more than 49% of employees overseas;
  • Less than $19.5M of tangible net worth; AND
  • Less than $6.5M of after tax net income averaged over the previous two years; AND
  • At least 25% of total capital in U.S. smaller enterprises, defined as having the following:
    • No more than 49% of employees overseas;
    • Less than $6M of tangible net worth; AND
    • Less than $2M of after tax net income averaged over the previous two years.

SBICs may not invest:

  • In U.S. small businesses with more than 49% of employees overseas;
  • Real estate;
  • Project finance;
  • Relenders; or
  • More than 10% of investable capital in any one business.

Important Regulations include the following:


FAQ: What information should my Executive Summary include?

Your Executive Summary should be roughly 3-5 pages long and should include the following information:

Narrative Section:

  • Investment Strategy;
  • Overview of investment criteria and target deal profile, including size, stage, industry and other portfolio company characteristics relevant to your investment strategy; and
  • Team biographies and a summary of the principals’ experience working together, if any.

Track Record Section:

Track Record Template Icon

Click to Download the Track Record Template

We have made available for download an Excel spreadsheet for use in submitting your track record information.  Program Development will not provide feedback for funds that fail to provide complete information or which submit track record information in an alternate format.

As stated above, applicants should only include investments their team members:

  • Voted on as members of an Investment/Credit Committee; OR
  • Led through due diligence, structuring, Investment Committee presentation and a meaningful period of post-close monitoring.

If you have any questions, please refer to the Contact Us section of our website.


[1] Companies with fewer than 500 employees typically qualify as U.S. small businesses


File Attachments: 
Attachments Size
Executive Summary TR.xls 39Kb