13 CFR 107.740 - Portfolio diversification (“overline” limitation).
(a)General rule. This § 107.740 applies if you have outstanding Leverage or intend to issue Leverage in the future. Unless SBA approved your license application based upon a plan to issue less than two tiers of Leverage, you may provide Financing or a Commitment to a Small Business if the resulting amount of your aggregate Financings and Commitments to such Small Business and its Affiliates does not exceed 30 percent of the sum of:
(3) Any Distribution(s) you made under § 107.585, during the five years preceding the date of the Financing or Commitment, which reduced your Regulatory Capital by no more than two percent or which SBA approves for inclusion in the sum determined in this paragraph (a).
(b)Lower overline limit. If SBA approved your license application based upon a plan to issue less than two tiers of Leverage, the applicable percentage of the amount computed in paragraphs (a)(1) though (a)(3) of this section will be:
(1) 20 percent if the plan contemplates one tier of Leverage.
(2) 25 percent if the plan contemplates 1.5 tiers of Leverage.
(c) Outstanding Financings. For the purposes of paragraphs (a) and (b) of this section, you must measure each outstanding Financing at its original cost (including any amount of the Financing that was previously written off).
- 13 CFR 107.760 — How a Change in Size or Activity of a Portfolio Concern Affects the Licensee and the Portfolio Concern.
- 13 CFR 107.880 — Assets Acquired in Liquidation of Portfolio Securities.
- 13 CFR 107.1000 — Licensees Without Leverage - Exceptions to the Regulations.
- 13 CFR 107.740 — Portfolio Diversification (“overline” Limitation).
- 13 CFR 107.820 — Financings in the Form of Guarantees.