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Electronic Code of Federal Regulations

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e-CFR Data is current as of April 15, 2014

TITLE 13—Business Credit and Assistance

CHAPTER I—SMALL BUSINESS ADMINISTRATION

PART 107—SMALL BUSINESS INVESTMENT COMPANIES

rule

Subpart A—INTRODUCTION TO PART 107

§107.20
Legal basis and applicability of this part 107.
§107.30
Amendments to Act and regulations.
§107.40
How to read this part 107.
rule

Subpart B—DEFINITION OF TERMS USED IN PART 107

§107.50
Definition of terms.
rule

Subpart C—QUALIFYING FOR AN SBIC LICENSE

Organizing an SBIC

§107.100
Organizing a Section 301(c) Licensee.
§107.115
1940 Act and 1980 Act Companies.
§107.120
Special rules for a Section 301(d) Licensee owned by another Licensee.
§107.130
Requirement for qualified management.
§107.140
SBA approval of initial Management Expenses.
§107.150
Management-ownership diversity requirement.
§107.160
Special rules for Licensees formed as limited partnerships.

Capitalizing an SBIC

§107.200
Adequate capital for Licensees.
§107.210
Minimum capital requirements for Licensees.
§107.230
Permitted sources of Private Capital for Licensees.
§107.240
Limitations on including non-cash capital contributions in Private Capital.
§107.250
Exclusion of stock options issued by Licensee from Management Expenses.

Applying for an SBIC License

§107.300
License application form and fee.
§107.305
Evaluation of license applicants.
§107.310
When and how to apply for licensing as an Early Stage SBIC.
§107.320
Evaluation of Early Stage SBICs.
rule

Subpart D—CHANGES IN OWNERSHIP, CONTROL, OR STRUCTURE OF LICENSEE; TRANSFER OF LICENSE

Changes in Control or Ownership of Licensee

§107.400
Changes in ownership of 10 percent or more of Licensee but no change of Control.
§107.410
Changes in Control of Licensee (through change in ownership or otherwise).
§107.420
Prohibition on exercise of ownership or Control rights in Licensee before SBA approval.
§107.430
Notification to SBA of transactions that may change ownership or Control.
§107.440
Standards governing prior SBA approval for a proposed transfer of Control.
§107.450
Notification to SBA of pledge of Licensee's shares.

Restrictions on Common Control or Ownership of Two or More Licensees

§107.460
Restrictions on Common Control or ownership of two (or more) Licensees.

Change in Structure of Licensee

§107.470
SBA approval of merger, consolidation, or reorganization of Licensee.

Transfer of License

§107.475
Transfer of license.
rule

Subpart E—MANAGING THE OPERATIONS OF A LICENSEE

General Requirements

§107.500
Lawful operations under the Act.
§107.501
Identification as a Licensee.
§107.502
Representations to the public.
§107.503
Licensee's adoption of an approved valuation policy.
§107.504
Equipment and office requirements.
§107.506
Safeguarding Licensee's assets/Internal controls.
§107.507
Violations based on false filings and nonperformance of agreements with SBA.
§107.509
Employment of SBA officials.

Management and Compensation

§107.510
SBA approval of Licensee's Investment Adviser/Manager.
§107.520
Management Expenses of a Licensee.

Cash Management by a Licensee

§107.530
Restrictions on investments of idle funds by leveraged Licensees.

Borrowing by Licensees From Non-SBA Sources

§107.550
Prior approval of secured third-party debt of leveraged Licensees.
§107.560
Subordination of SBA's creditor position.
§107.565
Restrictions on third-party debt of Early Stage SBICs.
§107.570
Restrictions on third-party debt of issuers of Participating Securities.

Voluntary Decrease in Licensee's Regulatory Capital

§107.585
Voluntary decrease in Licensee's Regulatory Capital.

Requirement To Conduct Active Investment Operations

§107.590
Licensee's requirement to maintain active operations.
rule

Subpart F—RECORDKEEPING, REPORTING, AND EXAMINATION REQUIREMENTS FOR LICENSEES

Recordkeeping Requirements for Licensees

§107.600
General requirement for Licensee to maintain and preserve records.
§107.610
Required certifications for Loans and Investments.
§107.620
Requirements to obtain information from Portfolio Concerns.

Reporting Requirements for Licensees

§107.630
Requirement for Licensees to file financial statements with SBA (Form 468).
§107.640
Requirement to file Portfolio Financing Reports (SBA Form 1031).
§107.650
Requirement to report portfolio valuations to SBA.
§107.660
Other items required to be filed by Licensee with SBA.
§107.670
Application for exemption from civil penalty for late filing of reports.
§107.680
Reporting changes in Licensee not subject to prior SBA approval.

Examinations of Licensees by SBA for Regulatory Compliance

§107.690
Examinations.
§107.691
Responsibilities of Licensee during examination.
§107.692
Examination fees.
rule

Subpart G—FINANCING OF SMALL BUSINESSES BY LICENSEES

Determining the Eligibility of a Small Business for SBIC Financing

§107.700
Compliance with size standards in part 121 of this chapter as a condition of Assistance.
§107.710
Requirement to finance smaller enterprises.
§107.720
Small Businesses that may be ineligible for financing.
§107.730
Financings which constitute conflicts of interest.
§107.740
Portfolio diversification (“overline” limitation).
§107.750
Conditions for financing a change of ownership of a Small Business.
§107.760
How a change in size or activity of a Portfolio Concern affects the Licensee and the Portfolio Concern.

Structuring Licensee's Financing of Eligible Small Businesses: Types of Financing

§107.800
Financings in the form of Equity Securities.
§107.810
Financings in the form of Loans.
§107.815
Financings in the form of Debt Securities.
§107.820
Financings in the form of guarantees.
§107.825
Purchasing securities from an underwriter or other third party.

Structuring Licensee's Financing of an Eligible Small Business: Terms and Conditions of Financing

§107.830
Minimum duration/term of financing.
§107.835
Exceptions to minimum duration/term of Financing.
§107.840
Maximum term of Financing.
§107.845
Maximum rate of amortization on Loans and Debt Securities.
§107.850
Restrictions on redemption of Equity Securities.
§107.855
Interest rate ceiling and limitations on fees charged to Small Businesses (“Cost of Money”).
§107.860
Financing fees and expense reimbursements a Licensee may receive from a Small Business.
§107.865
Control of a Small Business by a Licensee.
§107.880
Assets acquired in liquidation of Portfolio securities.

Limitations on Disposition of Assets

§107.885
Disposition of assets to Licensee's Associates or to competitors of Portfolio Concern.

Management Services and Fees

§107.900
Management fees for services provided to a Small Business by Licensee or its Associate.
rule

Subpart H—NON-LEVERAGED LICENSEES—EXCEPTIONS TO REGULATIONS

§107.1000
Licensees without Leverage—exceptions to the regulations.
rule

Subpart I—SBA FINANCIAL ASSISTANCE FOR LICENSEES (LEVERAGE)

General Information About Obtaining Leverage

§107.1100
Types of Leverage and application procedures.
§107.1120
General eligibility requirements for Leverage.
§107.1130
Leverage fees and additional charges payable by Licensee.
§107.1140
Licensee's acceptance of SBA remedies under §§107.1800 through 107.1820.

Maximum Amount of Leverage for Which a Licensee Is Eligible

§107.1150
Maximum amount of Leverage for a Section 301(c) Licensee.
§107.1160
Maximum amount of Leverage for a Section 301(d) Licensee.
§107.1170
Maximum amount of Participating Securities for any Licensee.

Special Rules for Leverage Issued by an Early Stage SBIC

§107.1180
Required distributions to SBA by Early Stage SBICs.
§107.1181
Interest reserve requirements for Early Stage SBICs.
§107.1182
Valuation requirements for Early Stage SBICs based on Capital Impairment Percentage.

Conditional Commitments by SBA To Reserve Leverage for a Licensee

§107.1200
SBA's Leverage commitment to a Licensee—application procedure, amount, and term.
§107.1210
Payment of leverage fee upon receipt of commitment.
§107.1220
Requirement for Licensee to file quarterly financial statements.
§107.1230
Draw-downs by Licensee under SBA's Leverage commitment.
§107.1240
Funding of Licensee's draw request through sale to short-term investor.

Preferred Securities Leverage—Section 301(d) Licensees

§107.1400
Dividends or partnership distributions on 4 percent Preferred Securities.
§107.1410
Requirement to redeem 4 percent Preferred Securities.
§107.1420
Articles requirements for 4 percent Preferred Securities.
§107.1430
Redeeming 4 percent Preferred Securities with proceeds of non-subsidized Debentures.
§107.1440
Three percent preferred stock issued before November 21, 1989.
§107.1450
Optional redemption of Preferred Securities.

Participating Securities Leverage

§107.1500
General description of Participating Securities.
§107.1505
Liquidity requirements for Licensees issuing Participating Securities.
§107.1510
How a Licensee computes Earmarked Profit (Loss).
§107.1520
How a Licensee computes and allocates Prioritized Payments to SBA.
§107.1530
How a Licensee computes SBA's Profit Participation.
§107.1540
Distributions by Licensee—Prioritized Payments and Adjustments.
§107.1550
Distributions by Licensee—permitted “tax Distributions” to private investors and SBA.
§107.1560
Distributions by Licensee—required Distributions to private investors and SBA.
§107.1570
Distributions by Licensee—optional Distribution to private investors and SBA.
§107.1575
Distributions on other than Payment Dates.
§107.1580
Special rules for In-Kind Distributions by Licensees.
§107.1585
Exchange of Debentures for Participating Securities.
§107.1590
Special rules for companies licensed on or before March 31, 1993.

Funding Leverage by Use of SBA-Guaranteed Trust Certificates (“TCs”)

§107.1600
SBA authority to issue and guarantee Trust Certificates.
§107.1610
Effect of prepayment or early redemption of Leverage on a Trust Certificate.
§107.1620
Functions of agents, including Central Registration Agent, Selling Agent and Fiscal Agent.
§107.1630
SBA regulation of Brokers and Dealers and disclosure to purchasers of Leverage or Trust Certificates.
§107.1640
SBA access to records of the CRA, Brokers, Dealers and Pool or Trust assemblers.

Miscellaneous

§107.1700
Transfer by SBA of its interest in Licensee's Leverage security.
§107.1710
SBA authority to collect or compromise its claims.
§107.1720
Characteristics of SBA's guarantee.
rule

Subpart J—LICENSEE'S NONCOMPLIANCE WITH TERMS OF LEVERAGE

§107.1800
Licensee's agreement to terms and conditions in §§107.1810 and 107.1820.
§107.1810
Events of default and SBA's remedies for Licensee's noncompliance with terms of Debentures.
§107.1820
Conditions affecting issuers of Preferred Securities and/or Participating Securities.

Computation of Licensee's Capital Impairment

§107.1830
Licensee's Capital Impairment—definition and general requirements.
§107.1840
Computation of Licensee's Capital Impairment Percentage.
§107.1845
Determination of Capital Impairment Percentage for Early Stage SBICs.
§107.1850
Exceptions to Capital Impairment provisions for Licensees with outstanding Participating Securities.
rule

Subpart K—ENDING OPERATIONS AS A LICENSEE

§107.1900
Surrender of license.
rule

Subpart L—MISCELLANEOUS

§107.1910
Non-waiver of SBA's rights or terms of Leverage security.
§107.1920
Licensee's application for exemption from a regulation in this part 107.
§107.1930
Effect of changes in this part 107 on transactions previously consummated.


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