Title 13, Part 107 — Small Business Investment Companies

Legal basis and applicability of this part 107.

Severability.

Amendments to Act and regulations.

How to read this part 107.

Definition of terms.

Organizing a Section 301(c) Licensee.

1940 Act and 1980 Act Companies.

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Requirement for qualified management.

SBA approval of initial Management Expenses.

Management-ownership diversification requirement.

Special rules for Licensees formed as limited partnerships.

Adequate capital for Licensees.

Minimum capital requirements for Licensees.

Permitted sources of Private Capital for Licensees.

Limitations on including non-cash capital contributions in Private Capital.

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License application form and fee.

Evaluation of license applicants.

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Leverage portfolio diversification.

Changes in ownership of 10 percent or more of Licensee but no change of Control.

Changes in Control of Licensee (through change in ownership or otherwise).

Prohibition on exercise of ownership or Control rights in Licensee before SBA approval.

Notification to SBA of transactions that may change ownership or Control.

Standards governing prior SBA approval for a proposed transfer of Control.

Notification to SBA of pledge of Licensee's shares.

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

Transfer of license.

Lawful operations under the Act.

Identification.

Representations to the public.

Licensee's adoption of an approved valuation policy.

Equipment and office requirements.

Safeguarding Licensee's assets/Internal controls.

Violations based on false filings and nonperformance of agreements with SBA.

Employment of SBA officials.

SBA approval of Licensee's Investment Adviser/Manager.

Management Expenses of a Licensee.

Restrictions on investments of idle funds by leveraged Licensees.

Prior approval of secured third-party debt of Leveraged Licensees.

Subordination of SBA's creditor position.

Restrictions on third-party debt of Early Stage SBICs.

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Distributions and reductions in Regulatory Capital.

Licensee's requirement to maintain active operations.

General requirement for Licensee to maintain and preserve records.

Required certifications for Loans and Investments.

Requirements to obtain information from Portfolio Concerns.

Requirement for Licensees to file financial statements with SBA (Form 468).

Requirement to file Portfolio Financing Reports (SBA Form 1031).

Requirement to report portfolio valuations to SBA.

Other items required to be filed by Licensee with SBA.

Civil penalties.

Application for exemption from civil penalty for late filing of reports.

Reporting changes in Licensee not subject to prior SBA approval.

Examinations.

Responsibilities of Licensee during examination.

Examination fees.

Compliance with size standards in part 121 of this chapter as a condition of Assistance.

Requirement to finance smaller enterprises.

Small Businesses that may be ineligible for financing.

Financings which constitute conflicts of interest.

Portfolio diversification (“Overline” limitation).

Conditions for financing a change of ownership of a Small Business.

How a change in size or activity of a Portfolio Concern affects the Licensee and the Portfolio Concern.

Financings in the form of Equity Securities.

Financing in the form of Loans.

Financings in the form of Debt Securities.

Financings in the form of guarantees.

Purchasing securities from an underwriter or other third party.

Duration/term of financing.

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Restrictions on redemption of Equity Securities.

Interest rate ceiling and limitations on fees charged to Small Businesses (“Cost of Money”).

Financing fees and expense reimbursements a Licensee may receive from a Small Business.

Control of a Small Business by a Licensee.

Assets acquired in liquidation of Portfolio securities.

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

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

Non-leveraged Licensees—exceptions to this part.

Types of Leverage and application procedures.

General eligibility requirements for Leverage.

Leverage fees and Annual Charges.

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Maximum amount of Leverage.

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Required distributions to SBA by Early Stage SBICs.

Interest reserve requirements for Early Stage SBICs.

Valuation requirements for Early Stage SBICs based on Capital Impairment Percentage.

SBA's Leverage commitment to a Licensee—application procedure, amount, and term.

Payment of leverage fee upon receipt of commitment.

Requirement for Licensee to file quarterly financial statements.

Draw-downs by Licensee under SBA's Leverage commitment.

Funding of Licensee's draw request through sale to short-term investor.

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General description of Participating Securities.

Liquidity requirements for Licensees issuing Participating Securities.

How a Licensee computes Earmarked Profit (Loss).

How a Licensee computes and allocates Prioritized Payments to SBA.

How a Licensee computes SBA's Profit Participation.

Distributions by Licensee—Prioritized Payments and Adjustments.

Distributions by Licensee—permitted “tax Distributions” to private investors and SBA.

Distributions by Licensee—required Distributions to private investors and SBA.

Distributions by Licensee—optional Distribution to private investors and SBA.

Distributions on other than Payment Dates.

Special rules for In-Kind Distributions by Licensees.

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SBA authority to issue and guarantee Trust Certificates.

Effect of prepayment or early redemption of Leverage on a Trust Certificate.

Functions of agents, including Central Registration Agent, Selling Agent and Fiscal Agent.

SBA regulation of Brokers and Dealers and disclosure to purchasers of Leverage or Trust Certificates.

SBA access to records of the CRA, Brokers, Dealers and Pool or Trust assemblers.

Transfer by SBA of its interest in Licensee's Leverage security.

SBA authority to collect or compromise its claims.

Characteristics of SBA's guarantee.

Licensee's agreement to terms and conditions in §§ 107.1810 and 107.1820.

Events of default and SBA's remedies for Licensee's noncompliance with terms of Debentures.

Conditions affecting issuers of Preferred Securities and/or Participating Securities.

Licensee's Capital Impairment—definition and general requirements.

Computation of Licensee's Capital Impairment Percentage.

Determination of Capital Impairment Percentage for Early Stage SBICs.

Watchlist.

Surrender of license.

Non-waiver of SBA's rights or terms of Leverage security.

Licensee's application for exemption from a regulation in this part 107.

Effect of changes in this part 107 on transactions previously consummated.