Small Business Venture Capital Inc. (SBVCI) is BSBA's financial arm and was incorporated on February 6, 1996, as a business development organization. It provides equity financing for business start-ups and existing enterprises with good prospects, and technical assistance for the incorporation of businesses.

The purpose of the organization is to identify new business opportunities; assist in the incubation of the new businesses developed from these opportunities; provide assistance to existing entrepreneurial ventures and promote entrepreneurship in Barbados, resulting in new jobs, profitable business ventures and increased international competitiveness for small Barbadian businesses. The registered office of SBVCI is the Secretariat of the Small Business Association, Pelican Industrial Park, Princess Alice Highway, St. Michael, Barbados.

SBVCI provides equity financing, between$50,000 and $150,000 or up to 49% of the company's equity, to approved businesses. The recipient fo the equity financing is expected to pay dividends to SBVCI. SBVCI was not only set up as an avenue for businesses to access much needed funds but it also sought to address the fact that many businesses do not survive more that one generation of ownership. Often businesses are centered around one individual and there is not board of directors in place to help with business operations especially if the owner becomes sick or otherwise unavailable. In addition SBVCI has the potential to reduce cash flow issues as the payments are not rigid like that of a loan. Instead the amount of dividends paid depend on how well the business is functioning. For example if SBVCI purchases 10% of the equity of the company then SBVCI is entitiled to 10% of the after tax profit. The company must therefore supply financial statement to SBVCI for monitoring purposes.

SBVCI is expected to be a temporary partner with the companies as the partnership is expected to last a maximum of seven years. When the company matures to the point where it no longer needs the partnership, the principal will simply purchase SBVCI's shares in the company to attain 100% ownership.

Initial funding for SBVCI was provided from the Government of Barbados and SBVCI will invest primarily in businesses that are members of the Small Business Association (SBA), augmented by investment in other small businesses with the objective of achieving maximum long-term capital appreciation. Eligible businesses must meet criteria which include that the business:

• must be incorporated and have a functioning Board of Directors
• must have a business plan
• must have three (3) years of financial statements
• must have business equity

To apply a company must send in an application letter with supporting documents. The Finance Manager at the Association can further guide any interested company interested in applying for equity finance. The Association then conducts an initial screening of the applicant. Applicants that pass the initial screening are then passed to the board for review. The board may also request a meeting with the principal of the company to discuss any issue. If the board approves the application, funds are distributed according to agreed arrangements. In addition a representative from SBVCI must sit on the successful companies board of directors. This representative has an interest not only in SBVCI but also in seeing its new partner develop, grow and maintain its growth. To date fifteeen businesses have accesssed equity financing.

Factoring is the next financial product that SBVCI is planning. Factoring is basically where businesses sell their receivables to SBVCI.