US Codex
C.F.R.
Browse by date

View an earlier version

Latest
Current
Browse all versions by date
Notes

13 C.F.R. §§ 107.1560–107.1580

4 sections in range

§107.1560. Distributions by Licensee—required Distributions to private investors and SBA.

13 C.F.R. § 107.1560

You must make Distributions under this § 107.1560 if you have outstanding Participating Securities or Earmarked Assets and you satisfy the conditions in paragraph (a) of this section. Distributions under this section are determined as of the end of each fiscal year. You must notify SBA of any planned distribution under this section 10 business days before the distribution date, unless SBA permits otherwise.
(a)
Conditions for making Distributions. Distributions under this section are subject to the following conditions:
(1)
You must have paid all Prioritized Payments, Adjustments and Charges, so that the balance in both your Distribution Account and your Accumulation Account is zero (see §§ 107.1520 and 107.1540).
(2)
You must have made any permitted tax Distribution that you choose to make under § 107.1550.
(3)
You must satisfy the liquidity requirement in § 107.1505.
(4)
The amount you distribute under this section must not exceed your remaining Retained Earnings Available for Distribution.
(b)
Total amount you must distribute. Unless SBA permits otherwise, the total amount you must distribute equals the result (if greater than zero) of the following computation:
(1)
Your Retained Earnings Available for Distribution as of the end of your fiscal year, after giving effect to any Distribution under §§ 107.1540 and 107.1550; minus
(2)
All previous Distributions under this section and § 107.1570(a) that were applied as redemptions or repayments of Leverage; plus
(3)
All previous Distributions under § 107.1570(b) that reduced your Retained Earnings Available for Distribution.
(c)
When you must make Distributions. You must make the required Distributions on either the first or second Payment Date following the end of your fiscal year.
(d)
Effect of Distributions on Retained Earnings Available for Distribution. Distributions under this § 107.1560 have the following effect on your Retained Earnings Available for Distribution:
(1)
All Distributions to private investors reduce Retained Earnings Available for Distribution.
(2)
Distributions to SBA, or its designated agent or Trustee, reduce Retained Earnings Available for Distribution if they are applied as payments of Profit Participation (see paragraph (g) of this section).
(3)
Distributions to SBA, or its designated agent or Trustee, do not reduce Retained Earnings Available for Distribution if they are applied as a repayment or redemption of Leverage (see paragraph (g) of this section).
(e)
SBA's share of the total Distribution. Use the following table to determine the percentage share of the total Distribution (from paragraph (b) of this section) that goes to SBA (or its designated agent or Trustee):
(f)
Exceptions to the Distribution requirement.
(1)
With SBA's prior written approval, you may withhold from distribution reasonable reserves necessary to protect your investments or relative position in Loans and Investments and to meet contingent liabilities.
(i)
If you submit a written request for SBA approval, you may consider it approved unless SBA notifies you otherwise within 30 days from receipt.
(ii)
Reserves that you withhold from distribution may not be used to make investments in additional portfolio companies.
(iii)
Withholding of reserves under this paragraph (f)(1) is not a “payment failure” in violation of § 107.1820(e)(6).
(2)
SBA may restrict Distributions under this § 107.1560 if SBA determines that the value of your assets is materially overstated. SBA must give you notice of such a determination in advance of your proposed Distribution.
(g)
How SBA will apply your Distributions. Your Distributions to SBA (or its designated agent or Trustee) under this § 107.1560 will be applied in the following order:
(1)
First, to Profit Participation;
(2)
Second, as a redemption of Participating Securities in order of issue; and
(3)
Third, as the repayment of principal of any outstanding Debentures, with such repayment to be made into escrow on terms and conditions SBA determines.
Notes, amendments, and revision history

Amendments

[61 FR 3189, Jan. 31, 1996, as amended at 63 FR 5872, Feb. 5, 1998; 91 FR 9, Jan. 2, 2026]

Authority

Authority: 15 U.S.C. 662, 681-687, 687b-h, 687k-m.

Source

Source: 61 FR 3189, Jan. 31, 1996, unless otherwise noted.

Amendments

[61 FR 3189, Jan. 31, 1996, as amended at 63 FR 5872, Feb. 5, 1998; 91 FR 9, Jan. 2, 2026]

§107.1570. Distributions by Licensee—optional Distribution to private investors and SBA.

13 C.F.R. § 107.1570

If you have outstanding Participating Securities or Earmarked Assets, you may make two types of optional Distributions under this § 107.1570: quarterly Distributions determined the same way as the required annual Distributions in § 107.1560, and Distributions allocated between SBA and your private investors in proportion to the capital contributions of each. You must notify SBA of any planned distribution under this section 10 business days before the distribution date, unless SBA permits otherwise.
(a)
Quarterly Distributions subject to conditions in § 107.1560.
(1)
You may make Distributions under this paragraph (a) as of the end of any fiscal quarter, giving SBA (or its designated agent or Trustee) a percentage share determined under § 107.1560(e).
(2)
Such Distributions are subject to all the provisions in § 107.1560 (a)(1), (a)(3), (a)(4), (d), (f)(2), and (g).
(3)
You may make such Distributions only on the next Payment Date following the end of your fiscal quarter.
(4)
The total amount of such Distributions may not exceed the result of the following computation:
(i)
Your Retained Earnings Available for Distribution as of the end of your fiscal quarter; minus
(ii)
All previous Distributions under this paragraph (a) or § 107.1560 that were applied as redemptions or repayments of Leverage; plus
(iii)
All previous Distributions under paragraph (b) of this section that reduced your Retained Earnings Available for Distribution.
(b)
Other optional Distributions. On any Payment Date, you may make additional Distributions to your private investors and to SBA (or its designated agent or Trustee) under this paragraph (b).
(1)
Conditions for making a Distribution. You may make a Distribution under this paragraph (b) only if:
(i)
You have distributed all Earned Prioritized Payments, earned Adjustments, and earned Charges, so that the balance in your Distribution Account is zero (see § 107.1520).
(ii)
You have distributed all Profit Participation computed under § 107.1530 which you are required to distribute under § 107.1560 or permitted to distribute under paragraph (a) of this section, as appropriate, and you have made all required Distributions under § 107.1560.
(iii)
You satisfy the liquidity requirement in § 107.1505 or obtain SBA's prior written approval of the Distribution.
(iv)
You do not have a condition of Capital Impairment.
(v)
The Distribution does not reduce your Regulatory Capital (excluding commitments from Institutional Investors) below the minimum required under § 107.210, unless SBA approves the reduction as part of a plan of liquidation.
(vi)
The Distribution does not cause you to have excess Leverage contrary to section 303 of the Act.
(2)
SBA's share of Distribution.
(i)
If your Capital Impairment Percentage under § 107.1840 is zero, SBA's percentage share of any Distribution under this paragraph (b) equals:
(ii)
If your Capital Impairment Percentage under § 107.1840 is greater than zero, you must modify the formula in paragraph (b)(2)(i) of this section by replacing Leverageable Capital with:
(3)
How SBA will apply Distributions. Any amounts you distribute to SBA, or its designated agent or Trustee, under this paragraph (b) will be applied as a repayment or redemption of Leverage in the order set forth in § 107.1560(g)(3) through (g)(5).
(4)
Effect of Distributions on Retained Earnings Available for Distribution. Any amounts you distribute to non-SBA investors under this paragraph (b) must reduce your Retained Earnings Available for Distribution to zero before reducing your Private Capital.
(5)
Permitted exception to § 107.585. You may make any Distribution permitted by this paragraph (b), even if the result is a reduction in your Regulatory Capital that would otherwise be prohibited under § 107.585.
Notes, amendments, and revision history

Amendments

[61 FR 3189, Jan. 31, 1996, as amended at 63 FR 5872, Feb. 5, 1998]

Authority

Authority: 15 U.S.C. 662, 681-687, 687b-h, 687k-m.

Source

Source: 61 FR 3189, Jan. 31, 1996, unless otherwise noted.

Amendments

[61 FR 3189, Jan. 31, 1996, as amended at 63 FR 5872, Feb. 5, 1998]

§107.1575. Distributions on other than Payment Dates.

13 C.F.R. § 107.1575

(a)
Permitted Distributions on other than Payment Dates. Notwithstanding any provisions to the contrary in §§ 107.1540 through 107.1570, you may make Distributions on dates other than Payment Dates as follows:
(1)
Required annual Distributions under § 107.1540(a)(1), annual Distributions under § 107.1550, and any Distributions under § 107.1560 must be made no later than the second Payment Date following the end of your fiscal year.
(2)
Required Distributions under § 107.1540(b) must be made no later than the first Payment Date following the end of the applicable fiscal quarter;
(3)
Optional Distributions under § 107.1540(a)(2) and § 107.1570 may be made on any date.
(4)
Quarterly Distributions under § 107.1550 must be made no earlier than the last day of the calendar quarter for which the Distribution is being made and no later than the first Payment Date following the end of such calendar quarter.
(b)
Conditions for making Distribution. All Distributions under this section are subject to the following conditions:
(1)
You must obtain SBA's written approval before the distribution date;
(2)
The ending date of the period for which you compute your Earmarked Profits, Prioritized Payments, Adjustments, Charges, Profit Participation, Retained Earnings Available for Distribution, liquidity ratio, Capital Impairment, and any other applicable computations required under §§ 107.1500 through 107.1570, must be:
(i)
The distribution date, or
(ii)
If your Distribution includes annual Distributions under §§ 107.1540(a)(1), 107.1550 and/or 107.1560, your most recent fiscal year end;
(3)
If your Distribution includes an amount which SBA will apply as a redemption of Participating Securities, the effective date of such redemption, for all purposes including future computations of Prioritized Payments, will be the next Payment Date following the distribution date.
Notes, amendments, and revision history

Amendments

[63 FR 5872, Feb. 5, 1998, as amended at 64 FR 70997, Dec. 20, 1999]

Authority

Authority: 15 U.S.C. 662, 681-687, 687b-h, 687k-m.

Source

Source: 61 FR 3189, Jan. 31, 1996, unless otherwise noted.

Amendments

[63 FR 5872, Feb. 5, 1998, as amended at 64 FR 70997, Dec. 20, 1999]

§107.1580. Special rules for In-Kind Distributions by Licensees.

13 C.F.R. § 107.1580

(a)
In-Kind Distributions while Licensee has outstanding Participating Securities. A Distribution under §§ 107.1540, 107.1560 or 107.1570 may consist of securities (an “In-Kind Distribution”). Such a Distribution must satisfy the conditions in this paragraph (a).
(1)
You may distribute only Distributable Securities.
(2)
You must distribute each security pro-rata to all investors and to SBA or its designated agent or Trustee, based on the amounts that each party would receive if the Distribution were in cash.
(3)
You must impute a gain (loss) on each security being distributed as if it were being sold, using the value of the security as of the declaration date of the Distribution (if you are a Corporate Licensee) or the distribution date (if you are a Partnership Licensee).
(4)
You must deposit SBA's share of securities being distributed with a disposition agent designated by SBA. As an alternative, if you agree, SBA may direct you to dispose of its shares. In this case, you must promptly remit the proceeds to SBA.
(b)
In-Kind Distributions after Licensee has redeemed all Participating Securities. This paragraph (b) applies from the time you redeem all your Participating Securities until you dispose of all your Earmarked Assets.
(1)
You may make an In-Kind Distribution of an Earmarked Asset only if you pay SBA the lower of:
(i)
An amount equal to the Unrealized Appreciation on the asset; or
(ii)
The full amount of your Accumulated Prioritized Payments and unpaid Adjustments.
(2)
You must obtain SBA's prior written approval of any In-Kind Distribution of Earmarked Assets that are not Distributable Securities, specifically including approval of the valuation of the assets.
Notes, amendments, and revision history

Amendments

[61 FR 3189, Jan. 31, 1996, as amended at 63 FR 5872, Feb. 5, 1998; 64 FR 70997, Dec. 20, 1999]

Authority

Authority: 15 U.S.C. 662, 681-687, 687b-h, 687k-m.

Source

Source: 61 FR 3189, Jan. 31, 1996, unless otherwise noted.

Amendments

[61 FR 3189, Jan. 31, 1996, as amended at 63 FR 5872, Feb. 5, 1998; 64 FR 70997, Dec. 20, 1999]