§ 107.1150
Maximum amount of Leverage for a Section 301(c) Licensee.
(a) Maximum amount of Leverage—(1) Amounts before indexing. If you are a Section 301(c) Licensee, the following table shows the maximum amount of Leverage you may have outstanding at any time, subject to the indexing adjustment set forth in paragraph (a)(2) of this section:
If your leverageable capital is:
Then your maximum leverage is:
(1) Not over $17,500,000
300 percent of Leverageable Capital
(2) Over $17,500,000 but not over $35,100,000
$52,500,000 + [2 × (Leverageable Capital −$17,500,000)]
(3) Over $35,100,000 but not over $52,600,000
$87,700,000 + (Leverageable Capital −$35,100,000)
(4) Over $52,600,000
$105,200,000
(2) Indexing of maximum amount of Leverage. SBA will adjust the amounts in paragraph (a) of this section annually to reflect increases through September in the Consumer Price Index published by the Bureau of Labor Statistics. SBA will publish the indexed maximum Leverage amounts each year in a Notice in the Federal Register.
(b) Exceptions to maximum Leverage provisions—(1) Licensees under Common Control. Two or more Licensees under Common Control may have aggregate outstanding Leverage over $105,200,000 (subject to indexing as set forth in paragraph (a)(2) of this section) only if SBA gives them permission to do so. SBA may grant such permission on a case-by-case basis only. SBA may impose any terms and conditions SBA considers appropriate to minimize its risk of loss in the event of default.
(2) Licensees with excess Leverage issued before March 31, 1993. If you had outstanding Debentures on March 31, 1993 that exceeded 300 percent of your Leverageable Capital:
(i) You do not have to prepay the excess amount.
(ii) You may apply for an additional Debenture guarantee or Participating Security guarantee if you use the proceeds solely to pay the amount due at maturity on a Debenture issued before March 31, 1993. The new Debenture or Participating Security must mature on or before September 30, 2002.
(iii) You must maintain at least 65 percent of your “Total Funds Available for Investment” in “Venture Capital Financings” (as defined in § 107.1160(e) and (f), respectively) until your outstanding Debentures no longer exceed 300 percent of your Leverageable Capital.
(3) Maximum amount of Participating Securities. See § 107.1170.
[61 FR 3189, Jan. 31, 1996, as amended at 64 FR 70996, Dec. 20, 1999]