SBICs:
A)were chartered by the SBA to help start-up companies find private financing from commercial banks and finance companies.
B)provide short-term debt-based capital to small businesses through the sale of the debt to private investors.
C)cannot invest in or lend money to a business for more than five years.
D)were created by the Small Business Investment Act to use a combination of private and federal guaranteed debt to provide long-term capital to small businesses.

Question

Quizplus · Accepted Answer

SBICs (Small Business Investment Companies) were created by the Small Business Investment Act to use a combination of private and federal guaranteed debt to provide long-term capital to small businesses. This capital can be used for various purposes such as purchasing equipment, funding expansion plans, or acquiring other businesses. SBICs can invest in or lend money to a business for more than five years, unlike option C. Options A and B do not correctly describe the purpose and function of SBICs.