Pursuant to a congressional request, GAO provided information on small business investment companies (SBIC) and specialized small business investment companies (SSBIC), focusing on: (1) trends in the number, funding, losses, capitalization, size, and liquidation of SBIC and SSBIC between 1990 and 1994; (2) SBIC and SSBIC investment activities between 1990 and 1994; and (3) the educational background and work experience of personnel in the Small Business Administration's (SBA) Investment Division, which manages the SBIC program.

GAO found that: (1) in general, between fiscal years (FY) 1990 and 1994, the number of SBIC and SSBIC participating in the program declined and federal funding decreased, while net losses increased; (2) SBIC and SSBIC brought more private capital into the programs, while the total amount of leverage provided to SBIC and SSBIC declined; (3) as of December 1994, 192 SBIC and SSBIC were in liquidation, with SBA expecting to recover $443 million of the $790 million of funds owed; (4) 17 SSBIC paid SBA $15.3 million to repurchase preferred stock with a par value of $43.4 million under the Three Percent Preferred Stock Repurchase Program; and (5) SBIC and SSBIC provided between $490 million and $806 million in funding for small businesses between FY 1990 and 1993 and provided $1 billion in funding in FY 1994. GAO also found that: (1) SBIC have made a greater proportion of equity investments while SSBIC have primarily provided loans; (2) more than 90 percent of SBA Investment Division employees have at least a bachelor's degree, most of which are in the accounting, finance, or business administration fields; and (3) most Investment Division employees have an average of 11 years of SBA work experience, and 7.7 years work experience primarily in the accounting, auditing, banking, and investment fields.