New Markets Venture Capital Program

To promote economic development and the creation of wealth and job opportunities in low-income geographic areas and among individuals living in such areas, through developmental venture capital investments in smaller enterprises located in such areas.


Agency - Small Business Administration

The Small Business Administration maintains and strengthens the nation's economy by aiding, counseling, assisting and protecting the interests of small businesses and by helping families and businesses recover from national disasters.



Program Accomplishments

Not applicable.

Uses and Use Restrictions

Recipients are SBA approved New Markets Venture Capital Companies (NMVCCs) that use funds from debentures guaranteed by SBA to make equity capital investments in smaller enterprises located in low-income geographic areas.

Recipients use OA grant funds to provide management and technical assistance to smaller enterprises in which they intend or make such investments.

Recipients must not use grant funds for their own general and administrative expenses.

Term of guaranteed debenture is up to 10 years, with no payments required in years 1 to 5, interest only payments due semi- annually in years 6 to 10, and a balloon repayment of principal due at maturity.

Cost is approximately 100 basis points over comparable U. S. Treasury Securities.

Prepayment is allowed without penalty after year 1.



Eligibility Requirements

Applicant Eligibility

No new funding will be requested for this program.

Beneficiary Eligibility

Not applicable.

Credentials/Documentation

Not applicable.

Aplication and Award Process

Preapplication Coordination

None.

This program is excluded from coverage under E.O.

12372.

Application Procedures

Not applicable.

Award Procedures

Not applicable.

Deadlines

Not applicable.

Authorization

Small Business Investment Act of 1958, as amended, Title III, Part B, Sections 351-368; 15 U.S.C. 689 - 689q.

Range of Approval/Disapproval Time

Not applicable.

Appeals

Not applicable.

Renewals

Not applicable.

Assistance Considerations

Formula and Matching Requirements

Not applicable.

Length and Time Phasing of Assistance

Not applicable.

Post Assistance Requirements

Reports

SBA will request financial information including, but not limited to, financial statements, economic impact and community development information, and portfolio financing reports and valuations.

SBA will require both annual and quarterly reports.

Audits

SBA will require an annual financial report performed by an independent public accountant and an annual examination performed by SBA's internal examiners.

Records

Appropriate records as needed for requirements of 111 and 112.

Financial Information

Account Identification

Guarantees (Loans) 73-1154-0-1-376;
Operational Assistance grants (Grants) 73-0100-0-1-376.

Obigations

Administrative: FY 07 $210,000; FY 08 $242,000; FY 09 $251,000.

Range and Average of Financial Assistance

Not applicable.

Regulations, Guidelines, and Literature

13 CFR Part 108.

Information Contacts

Regional or Local Office

None.

Headquarters Office

SBA, Investment Division, New Markets Venture Capital Program, 409 3rd Street, N.W., Suite 6300, Washington, DC 20416. Telephone: (202) 205-6510.

Criteria for Selecting Proposals

Equity venture capital finance experience, community development finance experience, Federal grant administration experience and technical assistance experience.



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