Initially, an SBIC was allowed to finance small companies only through the purchase of convertible debentures or by making long-term loans. Now, they may invest through various other means: common stock, debentures with or without conversion features, some form of debt with common stock warrants. Formerly not allowed, investments can now be made in companies whose securities are traded on stock exchanges or over-the-counter. Growth with a Shelter Generally speaking, the convertible debenture is still the most popular form of investment medium. Typical is the way Electronics Capital Corporation (the first licensed SBIC) made its first commitment by buying $750,000 in 8 per cent convertible debentures of Potter Instrument Co.


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