New Government Study: Small Business Investment Company-Funded Businesses “Are a Robust Source of Job Creation in the U.S. Economy”

SBIC-Funded Small Businesses Created Almost 3M Jobs

WASHINGTON, D.C. – A new Library of Congress report of the Small Business Investment Company (SBIC) program concludes that “SBIC-funded small businesses are a robust source of job creation for the U.S. economy.”

The report finds that (SBIC)-funded small businesses have created almost 3 million jobs at 11,681 businesses between 1995 through 2014. That averages out to over 426 new jobs created each day at small businesses across America. The report also finds that businesses backed by SBICs supported over 9.5 million small business jobs over the same period. This period of robust job growth and support occurred despite two very severe recessions during the period.

Established in 1958, the SBIC program was created to facilitate private capital investment in small businesses lacking access to more traditional sources of capital. SBICs are highly regulated private equity funds that provide long term capital exclusively to domestic small businesses.


  • The SBIC-funded small businesses in the sample created almost 3 million jobs from Oct 1995 – Dec 2014. An average of 253 jobs were created at each business financed.
  • The SBIC-funded small businesses created or sustained almost 9.5 million jobs during the same period. 810 jobs were created or sustained for each business financed. This measurement includes not just jobs added after receiving SBIC capital, but also the jobs maintained by those businesses receiving the capital. This includes job support and creation through two severe recessions.
  • On average, one job was created for every $14,458 invested, and an average of one job was created or sustained for every $4,525.
    The program operates with low administrative cost to the federal government. The net administrative cost for every $1M of funding invested in small businesses was $2,400, with an average administrative cost of about $35 per job created by the program. (For the sample period covering 1999 and 2015)

SBICs made $6.285 billion in domestic small business investments in fiscal year 2015.

“Small business investment is critical to job growth and the SBIC program is an exceptionally effective tool to get private capital to growing small businesses. This report makes clear that SBICs play a vital and necessary role in our nation’s overall economy.” said Brett Palmer, President of the SBIA.

About the study’s authors:

Dr. John Paglia is a professor of finance at Pepperdine University’s Graziadio School of Business and Management, and founding executive director of the Peate Institute for Entrepreneurship. Dr. Paglia also founded and directed the Pepperdine Private Capital Markets Project, which examines the demand for capital by and financing success rates for business owners.

Dr. David T. Robinson, a professor of finance and the J. Rex Fuqua Distinguished Professor of International Management at Duke University and a research associate at the National Bureau of Economic Research.

About the Small Business Investor Alliance (SBIA):

The Small Business Investor Alliance (SBIA) is the premier organization of lower middle market private equity funds and investors. SBIA works on behalf of its members as a tireless advocate for policies that promote competitive markets and robust domestic investment for growing small businesses. SBIA has been playing a pivotal role in promoting the growth and vitality of the private equity industry for over 50 years. For more information, visit or call (202) 628-5055.