e-CFR data is current as of January 14, 2021
TITLE 13—Business Credit and Assistance
CHAPTER I—SMALL BUSINESS ADMINISTRATION PART 107—SMALL BUSINESS INVESTMENT COMPANIES
Subpart A—INTRODUCTION TO PART 107
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Legal basis and applicability of this part 107. |
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Amendments to Act and regulations. |
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How to read this part 107. |
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Subpart B—DEFINITION OF TERMS USED IN PART 107
Subpart C—QUALIFYING FOR AN SBIC LICENSE
Organizing an SBIC
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Organizing a Section 301(c) Licensee. |
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1940 Act and 1980 Act Companies. |
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Special rules for a Section 301(d) Licensee owned by another Licensee. |
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Requirement for qualified management. |
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SBA approval of initial Management Expenses. |
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Management-ownership diversity requirement. |
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Special rules for Licensees formed as limited partnerships. |
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Capitalizing an SBIC
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Adequate capital for Licensees. |
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Minimum capital requirements for Licensees. |
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Permitted sources of Private Capital for Licensees. |
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Limitations on including non-cash capital contributions in Private Capital. |
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Exclusion of stock options issued by Licensee from Management Expenses. |
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Applying for an SBIC License
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License application form and fee. |
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Evaluation of license applicants. |
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When and how to apply for licensing as an Early Stage SBIC. |
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Evaluation of Early Stage SBICs. |
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Subpart D—CHANGES IN OWNERSHIP, CONTROL, OR STRUCTURE OF LICENSEE; TRANSFER OF LICENSE
Changes in Control or Ownership of Licensee
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Changes in ownership of 10 percent or more of Licensee but no change of Control. |
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Changes in Control of Licensee (through change in ownership or otherwise). |
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Prohibition on exercise of ownership or Control rights in Licensee before SBA approval. |
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Notification to SBA of transactions that may change ownership or Control. |
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Standards governing prior SBA approval for a proposed transfer of Control. |
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Notification to SBA of pledge of Licensee's shares. |
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Restrictions on Common Control or Ownership of Two or More Licensees
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Restrictions on Common Control or ownership of two (or more) Licensees. |
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Change in Structure of Licensee
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SBA approval of merger, consolidation, or reorganization of Licensee. |
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Transfer of License
Subpart E—MANAGING THE OPERATIONS OF A LICENSEE
General Requirements
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Lawful operations under the Act. |
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Identification as a Licensee. |
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Representations to the public. |
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Licensee's adoption of an approved valuation policy. |
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Equipment and office requirements. |
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Safeguarding Licensee's assets/Internal controls. |
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Violations based on false filings and nonperformance of agreements with SBA. |
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Employment of SBA officials. |
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Management and Compensation
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SBA approval of Licensee's Investment Adviser/Manager. |
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Management Expenses of a Licensee. |
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Cash Management by a Licensee
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Restrictions on investments of idle funds by leveraged Licensees. |
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Borrowing by Licensees From Non-SBA Sources
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Prior approval of secured third-party debt of leveraged Licensees. |
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Subordination of SBA's creditor position. |
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Restrictions on third-party debt of Early Stage SBICs. |
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Restrictions on third-party debt of issuers of Participating Securities. |
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Voluntary Decrease in Licensee's Regulatory Capital
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Voluntary decrease in Licensee's Regulatory Capital. |
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Requirement To Conduct Active Investment Operations
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Licensee's requirement to maintain active operations. |
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Subpart F—RECORDKEEPING, REPORTING, AND EXAMINATION REQUIREMENTS FOR LICENSEES
Recordkeeping Requirements for Licensees
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General requirement for Licensee to maintain and preserve records. |
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Required certifications for Loans and Investments. |
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Requirements to obtain information from Portfolio Concerns. |
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Reporting Requirements for Licensees
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Requirement for Licensees to file financial statements with SBA (Form 468). |
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Requirement to file Portfolio Financing Reports (SBA Form 1031). |
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Requirement to report portfolio valuations to SBA. |
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Other items required to be filed by Licensee with SBA. |
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Application for exemption from civil penalty for late filing of reports. |
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Reporting changes in Licensee not subject to prior SBA approval. |
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Examinations of Licensees by SBA for Regulatory Compliance
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Responsibilities of Licensee during examination. |
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Subpart G—FINANCING OF SMALL BUSINESSES BY LICENSEES
Determining the Eligibility of a Small Business for SBIC Financing
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Compliance with size standards in part 121 of this chapter as a condition of Assistance. |
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Requirement to finance smaller enterprises. |
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Small Businesses that may be ineligible for financing. |
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Financings which constitute conflicts of interest. |
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Portfolio diversification (“overline” limitation). |
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Conditions for financing a change of ownership of a Small Business. |
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How a change in size or activity of a Portfolio Concern affects the Licensee and the Portfolio Concern. |
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Structuring Licensee's Financing of Eligible Small Businesses: Types of Financing
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Financings in the form of Equity Securities. |
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Financings in the form of Loans. |
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Financings in the form of Debt Securities. |
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Financings in the form of guarantees. |
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Purchasing securities from an underwriter or other third party. |
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Structuring Licensee's Financing of an Eligible Small Business: Terms and Conditions of Financing
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Minimum duration/term of financing. |
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Exceptions to minimum duration/term of Financing. |
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Maximum term of Financing. |
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Maximum rate of amortization on Loans and Debt Securities. |
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Restrictions on redemption of Equity Securities. |
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Interest rate ceiling and limitations on fees charged to Small Businesses (“Cost of Money”). |
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Financing fees and expense reimbursements a Licensee may receive from a Small Business. |
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Control of a Small Business by a Licensee. |
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Assets acquired in liquidation of Portfolio securities. |
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Limitations on Disposition of Assets
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Disposition of assets to Licensee's Associates or to competitors of Portfolio Concern. |
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Management Services and Fees
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Management fees for services provided to a Small Business by Licensee or its Associate. |
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Subpart H—NON-LEVERAGED LICENSEES—EXCEPTIONS TO REGULATIONS
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Licensees without Leverage—exceptions to the regulations. |
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Subpart I—SBA FINANCIAL ASSISTANCE FOR LICENSEES (LEVERAGE)
General Information About Obtaining Leverage
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Types of Leverage and application procedures. |
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General eligibility requirements for Leverage. |
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Leverage fees and additional charges payable by Licensee. |
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Licensee's acceptance of SBA remedies under §§107.1800 through 107.1820. |
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Maximum Amount of Leverage for Which a Licensee Is Eligible
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Maximum amount of Leverage for a Section 301(c) Licensee. |
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Maximum amount of Leverage for a Section 301(d) Licensee. |
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Maximum amount of Participating Securities for any Licensee. |
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Special Rules for Leverage Issued by an Early Stage SBIC
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Required distributions to SBA by Early Stage SBICs. |
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Interest reserve requirements for Early Stage SBICs. |
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Valuation requirements for Early Stage SBICs based on Capital Impairment Percentage. |
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Conditional Commitments by SBA To Reserve Leverage for a Licensee
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SBA's Leverage commitment to a Licensee—application procedure, amount, and term. |
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Payment of leverage fee upon receipt of commitment. |
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Requirement for Licensee to file quarterly financial statements. |
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Draw-downs by Licensee under SBA's Leverage commitment. |
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Funding of Licensee's draw request through sale to short-term investor. |
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Preferred Securities Leverage—Section 301(d) Licensees
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Dividends or partnership distributions on 4 percent Preferred Securities. |
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Requirement to redeem 4 percent Preferred Securities. |
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Articles requirements for 4 percent Preferred Securities. |
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Redeeming 4 percent Preferred Securities with proceeds of non-subsidized Debentures. |
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Three percent preferred stock issued before November 21, 1989. |
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Optional redemption of Preferred Securities. |
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Participating Securities Leverage
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General description of Participating Securities. |
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Liquidity requirements for Licensees issuing Participating Securities. |
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How a Licensee computes Earmarked Profit (Loss). |
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How a Licensee computes and allocates Prioritized Payments to SBA. |
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How a Licensee computes SBA's Profit Participation. |
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Distributions by Licensee—Prioritized Payments and Adjustments. |
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Distributions by Licensee—permitted “tax Distributions” to private investors and SBA. |
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Distributions by Licensee—required Distributions to private investors and SBA. |
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Distributions by Licensee—optional Distribution to private investors and SBA. |
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Distributions on other than Payment Dates. |
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Special rules for In-Kind Distributions by Licensees. |
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Exchange of Debentures for Participating Securities. |
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Special rules for companies licensed on or before March 31, 1993. |
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Funding Leverage by Use of SBA-Guaranteed Trust Certificates (“TCs”)
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SBA authority to issue and guarantee Trust Certificates. |
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Effect of prepayment or early redemption of Leverage on a Trust Certificate. |
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Functions of agents, including Central Registration Agent, Selling Agent and Fiscal Agent. |
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SBA regulation of Brokers and Dealers and disclosure to purchasers of Leverage or Trust Certificates. |
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SBA access to records of the CRA, Brokers, Dealers and Pool or Trust assemblers. |
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Miscellaneous
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Transfer by SBA of its interest in Licensee's Leverage security. |
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SBA authority to collect or compromise its claims. |
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Characteristics of SBA's guarantee. |
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Subpart J—LICENSEE'S NONCOMPLIANCE WITH TERMS OF LEVERAGE
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Licensee's agreement to terms and conditions in §§107.1810 and 107.1820. |
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Events of default and SBA's remedies for Licensee's noncompliance with terms of Debentures. |
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Conditions affecting issuers of Preferred Securities and/or Participating Securities. |
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Computation of Licensee's Capital Impairment
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Licensee's Capital Impairment—definition and general requirements. |
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Computation of Licensee's Capital Impairment Percentage. |
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Determination of Capital Impairment Percentage for Early Stage SBICs. |
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Exceptions to Capital Impairment provisions for Licensees with outstanding Participating Securities. |
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Subpart K—ENDING OPERATIONS AS A LICENSEE
Subpart L—MISCELLANEOUS
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Non-waiver of SBA's rights or terms of Leverage security. |
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Licensee's application for exemption from a regulation in this part 107. |
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Effect of changes in this part 107 on transactions previously consummated. |
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