--- kind: "section" citation: "13 C.F.R. § 107.1570" title: "13" number: "107.1570" heading: "Distributions by Licensee—optional Distribution to private investors and SBA." url: "https://uscodex.org/cfr/13/107.1570" --- # §107.1570. Distributions by Licensee—optional Distribution to private investors and SBA. 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](/cfr/13/107.1560.md), 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](/cfr/13/10.md) 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)](#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)](/cfr/13/107.1560.md?p=e). - (2) Such Distributions are subject to all the provisions in § [107.1560 (a)(1)](/cfr/13/107.1560.md?p=a-1), [(a)(3)](/cfr/13/107.1560.md?p=a-3), [(a)(4)](/cfr/13/107.1560.md?p=a-4), [(d)](/cfr/13/107.1560.md?p=a-d), [(f)(2)](/cfr/13/107.1560.md?p=f-2), and [(g)](/cfr/13/107.1560.md?p=f-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)](#a) or [§ 107.1560](/cfr/13/107.1560.md) that were applied as redemptions or repayments of Leverage; plus - (iii) All previous Distributions under [paragraph (b)](#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)](#b). - (1) **Conditions for making a Distribution.** You may make a Distribution under this [paragraph (b)](#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](/cfr/13/107.1520.md)). - (ii) You have distributed all Profit Participation computed under [§ 107.1530](/cfr/13/107.1530.md) which you are required to distribute under [§ 107.1560](/cfr/13/107.1560.md) or permitted to distribute under [paragraph (a)](#a) of this section, as appropriate, and you have made all required Distributions under [§ 107.1560](/cfr/13/107.1560.md). - (iii) You satisfy the liquidity requirement in [§ 107.1505](/cfr/13/107.1505.md) 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](/cfr/13/107.210.md), 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](/cfr/13/107.1840.md) is zero, SBA's percentage share of any Distribution under this [paragraph (b)](#b) equals: - (ii) If your Capital Impairment Percentage under [§ 107.1840](/cfr/13/107.1840.md) is greater than zero, you must modify the formula in [paragraph (b)(2)(i)](#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)](#b) will be applied as a repayment or redemption of Leverage in the order set forth in [§ 107.1560(g)(3) through (g)(5)](/cfr/13/107.1560.md?p=g-3..g-5). - (4) **Effect of Distributions on Retained Earnings Available for Distribution.** Any amounts you distribute to non-SBA investors under this [paragraph (b)](#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)](#b), even if the result is a reduction in your Regulatory Capital that would otherwise be prohibited under [§ 107.585](/cfr/13/107.585.md). ## Notes ### 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]