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Impact Reporting & Measurement

As part of its commitment to support the growth and development of America’s impact investing industry, SBA has incorporated impact reporting and measurement best practices.  Outlined in detail below are the specific requirements Impact SBICs must follow, depending on whether they make SBA-Identified impact investments or Fund-Identified impact investments.  (For more information about the differences between these two types of impact investments, please visit the Eligible Impact Investments section).

Reporting: All Impact SBICs

Impact SBICs are required to identify the investments used to fulfill their commitment to deploy at least 50% of their invested capital in impact investments.  Using the “Comments” section of Form 1031, the standard form all SBICs use to report new financings, Impact SBICs should identify impact investments as follows:

  1. Enter the term “Impact Investment:”
  2. After the semi-colon, indicate the type of impact investment that has been made:
    1. LMI
    2. QLICI
    3. Rural
    4. EDA
    5. Energy-Savings
    6. SBIR or STTR
    7. Fund-Identified

If the impact investment is a “Fund-Identified” impact investment, the Impact SBIC should use the space available in the comments section to describe how the investment meets the customized definition of an “impact investment” SBA approved during the licensing process.

Measurement: Fund-Identified Impact Investments

Impact SBICs that intend to fulfill their 50% investment requirement exclusively through the deployment of capital in SBA-identified impact investments have no further reporting or measurement requirements.  SBA will monitor the progress of these funds in meeting their impact objectives and will aggregate the data on individual impact investments for use in reporting on the overall success of the Impact Fund.

Impact SBICs that intend to fulfill their 50% investment requirement with capital deployed in Fund-Identified impact investments must commit to measure their impact.  These funds may choose one of the two assessment approaches outlined below.  All assessments must be submitted to SBA with the Impact SBIC’s next required financial statement submission (known as SBA Form 468).

Fund-Level Impact Assessment: Obtain an assessment or rating of the fund’s overall impact, based on an analysis of all the investments in the portfolio, subject to the following:

  1. The assessment or rating must be based on the Global Impact Investing Network’s (the GIIN) Impact Reporting and Investment Standards (IRIS);
  2. The assessment or rating must  be conducted by an independent, third-party, such as B Lab’s Global Impact Investment Ratings System (GIIRS)

An initial assessment must be obtained within two years of licensing.  A second assessment must be completed within two years of the end of the Impact SBIC’s investment period.

Portfolio Company Impact Assessment: Obtain an assessment of each individual impact investment, subject to the following:

  1. The assessment must be based on an SBA-approved measurement standard.  Currently, only IRIS, the reporting guidelines of the Global Reporting Initiative (GRI) and the standards developed by the Sustainability Accounting Standards Board (SASB) have been approved.
  2. The assessment must be completed by an independent, third-party, such as B Lab’s GIIRS

The assessment must be completed within two years of the Impact SBIC’s initial financing.