• Enlightenment Capital to Launch SBA-Backed Fund

    June 17, 2019  |  by Carten Cordell

    Months after capping its third investment fund and securing ownership in IT contractor Trowbridge & Trowbridge, Enlightenment Capital will soon see new investment backing for its newest fund from none other than the Small Business Administration.

    Enlightenment executives said Monday that the Chevy Chase investment firm was selected to participate in the SBA’s Small Business Investment Company (SBIC) program, which offers selected investors venture capital funding in the form of SBA-backed loans that can be directed toward small businesses.

    As a designated SBIC, Enlightenment will receive $2 for every $1 the firm invests in qualified small businesses through either debt or equity stakes issued through the new fund, providing new capital to direct toward businesses in the aerospace, defense and government sectors.

    Those businesses must have a net worth of less than $19.5 million and average net income of less than $6.5 million for the prior two years or be qualified as a small business under the SBA’s industry codes, which are often based on employee numbers or annual sales.

    The program allows Enlightenment to issue loans to companies between $250,000 to $10 million at an interest rate between 9% and 16%, take an equity stake of $100,000 to $5 million or a blend of the two. Between fiscal 2014 and fiscal 2018, the program has provided more than $29 billion in financing for small businesses.

    “The SBIC license is a significant achievement for Enlightenment and aligns well with our investment strategy,” said Devin Talbott, the firm's managing partner and founder, in a statement. “The SBIC enables us to expand our efforts to partner with best-in-class management teams and to provide strategic, flexible capital solutions to middle-market companies that are creating jobs, driving economic growth, and supporting the missions of their government customers.”

    The selection comes as the firm closed its third investment fund in May after it reached a $250 million fund hard cap. The closure followed the firm’s stakes in local companies like McLean’s Trowbridge & Trowbridge and Chantilly’s System High Corp.