Word: mesbic
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Troubles have also hit the so-called MESBIC (for Minority Enterprise Small Business Investment Company) program since its inception in 1969. An individual or company can form a MESBIC by putting up at least $150,000 in private capital; after investing most of this sum in nonwhite companies, the MESBIC can increase its original capital 15-fold through a combination of Government and private funding. There are now 62 MESBlCs, and they have the potential for investing millions. But Government regulations restrict the sum that a MESBIC can put into any one company...
This provision, says Frank Savage, president of the MESBIC owned by the Equitable Life Assurance Society, means that many of these otherwise promising ventures are largely limited to "mom-and-pop" businesses. Some of the first MESBlCs, such as the Arcata Investment Co. of Palo Alto, Calif., seem to have been confused about the difference between an investment loan and a charitable donation. Arcata folded in 1972, after nearly half of the businesses it had funded-including such risky ventures as a posh restaurant in the East Palo Alto ghetto-closed down...
General Motors has organized the MESBIC if you are familiar with it. It's a Minority Employment and Small Business Investment Company and we have invested a million dollars just to go toward helping people...
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