13 CFR 107.1505 - Liquidity requirements for Licensees issuing Participating Securities.

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§ 107.1505 Liquidity requirements for Licensees issuing Participating Securities.
If you have outstanding Participating Securities, you must maintain sufficient liquidity to avoid a condition of Liquidity Impairment. Such a condition will constitute noncompliance with the terms of your Leverage under § 107.1820(e).
(a) Definition of Liquidity Impairment. A condition of Liquidity Impairment exists when your Liquidity Ratio, as determined in paragraph (b) of this section, is less than 1.20. You are responsible for calculating whether you have a condition of Liquidity Impairment:
(1) As of the close of your fiscal year;
(2) At the time you apply for Leverage, unless SBA permits otherwise; and
(3) At such time as you contemplate making any Distribution.
(b) Computation of Liquidity Ratio. Your Liquidity Ratio equals your Total Current Funds Available (A) divided by your Total Current Funds Required (B), as determined in the following table:
Calculation of Liquidity Ratio
Financial account Amount reportedon SBA form 468 Weight Weighted amount
1 As determined by Licensee's management under its business plan.
(1) Cash and invested idle funds ×1.00
(2) Commitments from investors ×1.00
(3) Current maturities ×0.50
(4) Other current assets ×1.00
(5) Publicly Traded and Marketable Securities ×1.00
(6) Anticipated operating revenue for next 12 months (1) ×1.00
(7) Total Current Funds Available A
(8) Current liabilities ×1.00
(9) Commitments to Small Businesses ×0.75
(10) Anticipated operating expense for next 12 months (1) ×1.00
(11) Anticipated interest expense for next 12 months (1) ×1.00
(12) Contingent liabilities (guarantees) ×0.25
(13) Total Current Funds Required B
[61 FR 3189, Jan. 31, 1996, as amended at 63 FR 5869, Feb. 5, 1998]

Title 13 published on 2014-01-01

The following are only the Rules published in the Federal Register after the published date of Title 13.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2014-10-21; vol. 79 # 203 - Tuesday, October 21, 2014
    1. 79 FR 62819 - Small Business Investment Companies—Investments in Passive Businesses
      GPO FDSys XML | Text
      SMALL BUSINESS ADMINISTRATION
      Final rule.
      This rule is effective November 20, 2014.
      13 CFR Part 107

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United States Code
Statutes at Large

Title 13 published on 2014-01-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 13 CFR 107 after this date.

  • 2014-10-21; vol. 79 # 203 - Tuesday, October 21, 2014
    1. 79 FR 62819 - Small Business Investment Companies—Investments in Passive Businesses
      GPO FDSys XML | Text
      SMALL BUSINESS ADMINISTRATION
      Final rule.
      This rule is effective November 20, 2014.
      13 CFR Part 107