Key Idea #4: Find Cash on Capitol Hill. Medallion formed a Specialized Small Business Investment Corporation (SSBIC) to increase the access to capital for its minority borrowers.

Topic for Discussion: What's an SSBIC and how do they work?

Answer: In 1958, Congress created the Small Business Investment Corporation (SBIC) program because of the lack of venture capital available to small businesses. The U.S. Small Business Administration (SBA) was charged with the responsibility of overseeing the program. Under the program, profit-motivated companies make application to the SBA to be a regular small business investment corporation (SBIC) or a specialized SBIC (SSBIC), also known as 301(d) SBICs. Specialized SBICs invest in small businesses owned by entrepreneurs who are socially or economically disadvantaged, mainly members of minority groups. Not any lender can form an SBIC or an SSBIC.

The SBA has a rigorous pre-application screening process and, once approved for application, a $10,000 application fee to cover the costs of an extensive evaluation of the applicant.

Here's an excerpt from the U.S. Small Business Administration's website, providing a program overview: "Small business investment companies (SBICs) exist to supply equity capital, long-term loans and management assistance to qualifying small businesses. The privately owned and operated SBICs use their own capital and funds borrowed from the U.S. Small Business Administration (SBA) to provide financing to small businesses in the form of equity securities and long-term loans. SBICs are profit seeking organizations that select small businesses to be financed within rules and regulations set by SBA.

"Specialized SBICs (SSBIC) are a particular type of SBIC that provide assistance solely to small businesses owned by socially or economically disadvantaged persons. SBICs invest in a broad range of industries. Some SBICs seek out small businesses with new products or services because of the strong growth potential of such firms. Some SBICs specialize in the field in which their management has special competency. Most SBICs, however, consider a wide variety of investment opportunities. Only firms defined by SBA as small are eligible for SBIC financing.

"The SBA defines a company as small when its net worth is $18.0 million or less, and its average net (after tax) income for the preceding two years does not exceed $6.0 million. For businesses in industries for which the above standards are too low, alternative size standards are available. In determining whether a business qualifies, all of the business's parents, subsidiaries and affiliates are considered. Entrepreneurs have three sources to search for active SBICs. The first is our SBIC directory – a U.S. map on the SBIC homepage at SBA.gov/inv. Just click on the state or states where your company is located. (Coming soon - more search capabilities so entrepreneurs can look for SBICs according to investment stage, geographic or industry focus).

"The second source of SBIC information is under the member listing of the National Association of Small Business Investment Companies (NASBIC) at NASBIC.org. The third source is the National Association of Investment Companies (NAIC) website at www.NAICVC.com, which dedicates financial resources to investment in an ethnically diverse marketplace. We hope you, the entrepreneur; will take advantage of this area of our website and that you visit us frequently."

Although Medallion formed its SSBIC for the purpose of lending to, not investing in, small businesses, business owners should be aware that SBICs are one of the few sources of venture (equity) capital available to the small business. Talk to your local SBA office representative now to determine what SBICs are in your area and financing businesses like yours. Even if you have no need for capital at this point, it's a good idea to establish the relationship now in case you have an opportunity later to expand your business significantly with the right financing package.

You think about it: Could you make good use money for growth?

NOTE: Medallion Financial is the largest SBA lender in the US to women and minority-owned companies. It has been lending money to disadvantaged business owners for over 50 years. In the taxi industry it has lent over 1 billion dollars and with zero loses.