13 CFR 107.1830 - Licensee's Capital Impairment - definition and general requirements.

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§ 107.1830 Licensee's Capital Impairment - definition and general requirements.

(a)Applicability of this section. This section applies to Leverage issued on or after April 25, 1994. For Leverage issued before April 25, 1994, you must comply with paragraphs (e) and (f) of this section and the Capital Impairment regulations in this part in effect when you issued your Leverage. For all Leverage issued, you must also comply with any contractual provisions to which you have agreed.

(b)Significance of Capital Impairment condition. If you have a condition of Capital Impairment, you are not in compliance with the terms of your Leverage. As a result, SBA has the right to impose the applicable remedies for noncompliance in §§ 107.1810(g) and 107.1820(f).

(c)Definition of Capital Impairment condition. You have a condition of Capital Impairment if your Capital Impairment Percentage, as computed in § 107.1840, exceeds:

(1) For Section 301(d) Licensees, 75 percent.

(2) For Section 301(c) Licensees, the appropriate percentage from the following table:

Maximum Permitted Capital Impairment Percentages for Section 301(c) Licensees

If the percentage of equity capital investments (at cost) in your portfolio is: And your ratio of outstanding leverage to leverageable capital is: Then your maximum permitted capital impairment percentage is:
67% 100% or less 70
Over 100% but not over 200% 60
Over 200% 50
At least 40% but under 67% 100% or less 55
Over 100% but not over 200% 50
Over 200% 40
Under 40% 100% or less 45
Over 100% but not over 200% 40
Over 200% 35

(d)Phase-in of maximum permitted Capital Impairment Percentages for Section 301(c) Licensees. If you are a Section 301(c) Licensee, regardless of your maximum permitted Capital Impairment Percentage under paragraph (c) of this section, you will not have a condition of Capital Impairment if:

(1) Your Capital Impairment Percentage does not exceed 50 percent; and

(2) You have not reached your first fiscal year end occurring after April 25, 1995.

(e)Quarterly computation requirement and procedure. You must determine whether you have a condition of Capital Impairment as of the end of each fiscal quarter. You must notify SBA promptly if you are capitally impaired.

(f)SBA's right to determine Licensee's Capital Impairment condition. SBA may make its own determination of your Capital Impairment condition at any time.

[ 61 FR 3189, Jan. 31, 1996, as amended at 63 FR 5873, Feb. 5, 1998]

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.

United States Code
Statutes at Large

Title 13 published on 04-May-2017 03:04

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

  • 2017-05-02; vol. 82 # 83 - Tuesday, May 2, 2017
    1. 82 FR 20433 - Small Business Investment Companies: Passive Business Expansion and Technical Clarifications
      GPO FDSys XML | Text
      Final rule; delay of effective date and request for comment.
      The effective date of the SBA final rule published December 28, 2016 (81 FR 95419), delayed until March 21, 2017 at 82 FR 8499 and then further delayed until May 20, 2017 at 82 FR 14428, is further delayed until August 18, 2017. Comments on this document must be submitted no later than June 1, 2017.
      13 CFR Part 107