FRINK Linked Data Fragments server

Matches in SemOpenAlex for { <https://semopenalex.org/work/W1598492774> ?p ?o ?g. }

• W1598492774 endingPage "32" @default.
• W1598492774 startingPage "16" @default.
• W1598492774 abstract "In 1953, Congress established the Small Business Administration (SBA) to ensure the provision of adequate capital for the formation and growth of the nation's small businesses.(1) Small business investment companies (SBICs) are SBA-chartered and -regulated financial intermediaries that finance the activities of small business through equity investments and loans. While traditional financial intermediaries such as commercial banks provide loans to businesses, they do not, in general, provide equity financing. However, SBICs can simultaneously hold the equity of and lend to a client commercial firm. SBICs obtain their funds primarily from two sources - privately invested capital and long-term debentures (leverage) guaranteed by the SBA. In this article, we analyze the performance of 280 SBICs that were active at the beginning of 1986. Of these 280 SBICs, over half, or 56 percent, had failed by 1993. As of September 1995, 189 SBICs were in liquidation, with SBA-guaranteed debentures outstanding of over $500 million.(2) The U.S. General Accounting Office (GAO) estimated that only $200 million would ultimately be repaid (United States General Accounting Office 1995). While these absolute dollar losses are small, the failure rates and the associated losses per dollar of guaranteed debentures are quite high compared with those of banks and thrifts over the 1980-91 period.(3) Because the SBA, a government agency, provides funds directly to SBICs and serves as a financial guarantor of securities sold by SBICs to third parties, taxpayers' funds are at risk. As a result, policy-makers and taxpayers have a stake in evaluating the economic performance of SBICs. Such a study can shed light on the impact of government subsidization and loan guarantees on the behavior of financial intermediaries. Furthermore, the SBIC program enlarges the permissible activities and investments of banking organizations beyond those typically permitted for their commercial bank and venture capital units. Banking organizations own and operate SBICs, as well as other venture capital firms. While traditional bank-owned venture capital units can only own up to 5 percent of a small firm's equity, SBIC units of banking organizations can own up to 50 percent of a small firm's equity. Thus, the SBIC program gives banking organizations a way to hold a substantial amount of commercial firms' equity while simultaneously holding their debt. Learning about how bank-owned SBICs operate may shed light on what could happen if the restriction on bank ownership of shares in commercial enterprises were relaxed. In previous research, Brewer and Genay (1994, 1995) studied the profitability of SBICs and documented a negative relationship between their use of SBA leverage and returns on equity (ROE). In this article, we extend this work to consider the relationship between various financial factors and SBIC failure, as well as the relationship between those factors and ROE, with special attention paid to the roles played by SBA leverage and SBICs' investment choices. We find that the relationship between failure and SBA leverage is positive and that between ROE and SBA leverage is negative. Poor short-term performance, as measured by ROE, does not necessarily imply losses to the taxpayers. Losses are incurred only when an SBIC experiences sustained losses over time and is unable to meet its obligations. For this reason, we also use a long-term measure of SBIC performance, specifically whether an SBIC fails or survives, to assess the relationship between SBA funding and the performance of SBICs. Because Brewer and Genay (1994, 1995) found evidence that bank-owned SBICs differed significantly from nonbank-owned SBICs, we also consider whether the SBA leverage-performance relationship differs between bank-owned and nonbank-owned SBICs. We find that, compared with non-bank-owned SBICs, bank-owned SBICs had higher ROEs and lower SBA leverage use, and their investments in small businesses were more likely to be in equity form and to be intended for projects requiring careful monitoring, such as research and development and marketing projects. …" @default.
• W1598492774 created "2016-06-24" @default.
• W1598492774 creator A5012909960 @default.
• W1598492774 creator A5035029203 @default.
• W1598492774 creator A5057787831 @default.
• W1598492774 creator A5088735044 @default.
• W1598492774 date "1996-09-01" @default.
• W1598492774 modified "2023-09-23" @default.
• W1598492774 title "Performance and the Access to Government Guarantees: The Case of Small Business Investment Companies" @default.
• W1598492774 cites W1480564106 @default.
• W1598492774 cites W1540020130 @default.
• W1598492774 cites W1564475714 @default.
• W1598492774 cites W1567172716 @default.
• W1598492774 cites W1607469433 @default.
• W1598492774 cites W1964456233 @default.
• W1598492774 cites W1988568667 @default.
• W1598492774 cites W2020820958 @default.
• W1598492774 cites W2147442989 @default.
• W1598492774 cites W3023230851 @default.
• W1598492774 cites W3122375212 @default.
• W1598492774 cites W3140375912 @default.
• W1598492774 hasPublicationYear "1996" @default.
• W1598492774 type Work @default.
• W1598492774 sameAs 1598492774 @default.
• W1598492774 citedByCount "7" @default.
• W1598492774 countsByYear W15984927742015 @default.
• W1598492774 crossrefType "posted-content" @default.
• W1598492774 hasAuthorship W1598492774A5012909960 @default.
• W1598492774 hasAuthorship W1598492774A5035029203 @default.
• W1598492774 hasAuthorship W1598492774A5057787831 @default.
• W1598492774 hasAuthorship W1598492774A5088735044 @default.
• W1598492774 hasConcept C10138342 @default.
• W1598492774 hasConcept C109168655 @default.
• W1598492774 hasConcept C119857082 @default.
• W1598492774 hasConcept C144133560 @default.
• W1598492774 hasConcept C153083717 @default.
• W1598492774 hasConcept C17744445 @default.
• W1598492774 hasConcept C199539241 @default.
• W1598492774 hasConcept C199728807 @default.
• W1598492774 hasConcept C2777973936 @default.
• W1598492774 hasConcept C41008148 @default.
• W1598492774 hasConcept C73283319 @default.
• W1598492774 hasConceptScore W1598492774C10138342 @default.
• W1598492774 hasConceptScore W1598492774C109168655 @default.
• W1598492774 hasConceptScore W1598492774C119857082 @default.
• W1598492774 hasConceptScore W1598492774C144133560 @default.
• W1598492774 hasConceptScore W1598492774C153083717 @default.
• W1598492774 hasConceptScore W1598492774C17744445 @default.
• W1598492774 hasConceptScore W1598492774C199539241 @default.
• W1598492774 hasConceptScore W1598492774C199728807 @default.
• W1598492774 hasConceptScore W1598492774C2777973936 @default.
• W1598492774 hasConceptScore W1598492774C41008148 @default.
• W1598492774 hasConceptScore W1598492774C73283319 @default.
• W1598492774 hasIssue "5" @default.
• W1598492774 hasLocation W15984927741 @default.
• W1598492774 hasOpenAccess W1598492774 @default.
• W1598492774 hasPrimaryLocation W15984927741 @default.
• W1598492774 hasRelatedWork W113915390 @default.
• W1598492774 hasRelatedWork W1493428828 @default.
• W1598492774 hasRelatedWork W1579811405 @default.
• W1598492774 hasRelatedWork W164936379 @default.
• W1598492774 hasRelatedWork W1834837968 @default.
• W1598492774 hasRelatedWork W1985576790 @default.
• W1598492774 hasRelatedWork W2009830519 @default.
• W1598492774 hasRelatedWork W2241686398 @default.
• W1598492774 hasRelatedWork W2495975887 @default.
• W1598492774 hasRelatedWork W2582343793 @default.
• W1598492774 hasRelatedWork W2931139353 @default.
• W1598492774 hasRelatedWork W2989564337 @default.
• W1598492774 hasRelatedWork W2995834571 @default.
• W1598492774 hasRelatedWork W3016455261 @default.
• W1598492774 hasRelatedWork W3023639060 @default.
• W1598492774 hasRelatedWork W30889496 @default.
• W1598492774 hasRelatedWork W3122375212 @default.
• W1598492774 hasRelatedWork W3124090769 @default.
• W1598492774 hasRelatedWork W214890237 @default.
• W1598492774 hasRelatedWork W2614367550 @default.
• W1598492774 hasVolume "20" @default.
• W1598492774 isParatext "false" @default.
• W1598492774 isRetracted "false" @default.
• W1598492774 magId "1598492774" @default.
• W1598492774 workType "article" @default.