Regulatory Changes Spurring Creation of SBICs

Recent regulatory changes have created a rush by some of the biggest names in banking and finance to organize small business investment corporations, commonly known as SBICs.

Between Feb. 1 and Oct. 3, the Small Business Administration granted 32 new SBIC licenses, making it the fastest pace in years, according to Jim Trainer, vice president of the National Association of SBICs.

Included in the list of new licensees are 11 banks. Among them were Utah's Zions First National Bank, First Commerce Corp. of Louisiana, NationsBank of Maryland, Fifth Third Bank and U.S. Bancorp of Oregon.

Some banks were part of a consortium obtaining a license. The Northern Trust Co. is a 22.4% participant in a $45 million consortium that includes the state treasurer of Michigan and the National Rural Electric Cooperative. Likewise, Casco National Bank, Fleet Ventures Corp., Shawmut National Bank, and State Street Bank and Trust joined forces with North Atlantic Capital Corp. to form Maine Capital Partners.

Banks were not the only heavy hitters getting in the act, though. Michael Eisner and Lee M. Bass have gone together to form a $30 million Fort Worth-based company called SBIC Partners. Odyssey Partners and takeover kingpin Jerome Kohlberg were among the other notables forming SBICs this year.

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