SBA Form 856, Disclosure Statement Leveraged Licensees

SBA Form 856, Disclosure Statement Leveraged Licensees
SBA Form 856, Disclosure Statement Leveraged Licensees

What Is SBA Form 856?

SBA Form 856, Disclosure Statement Leveraged Licensees is a form used to collect information about certain obligations, transactions, and relationships as part of an onsite examination of the SBIC - a Small Business Investment Company. The form has to be completed by the management of an SBIC. The form must be addressed to a Small Business Administration (SBA) examiner. Submit the form according to the SBA examiner’s directions.

The latest version of the form was released by the SBA in May 2012 with all previous editions obsolete. The new SBA Form 856 fillable version is available for digital filing and download below:

The SBIC has to disclose information about the borrowed funds of license holders on the form. The financial information and portfolio information about companies licensed by the SBIC also has to be mentioned.

The form has to be signed by the SBIC representative to certify that the information provided is completely accurate. Any incorrect or false information provided in the statement can lead to fines of up to $1 million, imprisonment of up to 30 years, and civil fraud damages of three times the Government’s loss.

The second form in the SBA 856 series is the SBA Form 856A, Disclosure Statement Non-Leveraged Licensees. This form has the same purpose as the main form and is used to collect some information from the management of the SBIC as part of an on-site examination of the SBIC.

The main difference between the two forms is that the SBA Form 856A is used to report the information about the non-leveraged funds of license holders. The form has to disclose certain obligations, transactions, and relationships of licensees and is completed by the management of an SBIC.

SBA SBIC Program

The SBIC Program is a financial assistance program run by the SBA. Venture capitalists, private equity funds and other entities that invest in the small businesses of the United States are supported by the SBIC Program.

The program is focused on equity investments. An equity investment involves an investment company that buys some portion of another business. In fact, SBICs become co-owners of businesses. The SBIC Program also provides assistance and management to small businesses.

The funds for this program come from private investors and the SBA. The SBIC redistributes investments received from investors and the SBA and sends them out to different small businesses. Only companies defined by SBA as "small" are eligible for SBIC financing. Any small business has to qualify for this program.

Small business owners have to find existing SBICs that may be interested in financing their business. The owner of the business has to meet with an SBIC representative and prove to the eligibility of their business for SBIC financing. During the meeting, the business owner has to present a comprehensive business plan and map out its main selling points.

The SBIC reserves the right to refuse in financing a business.


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