---
kind: "section"
citation: "13 C.F.R. § 108.740"
title: "13"
number: "108.740"
heading: "Portfolio diversification (“overline” limitation)."
url: "https://uscodex.org/cfr/13/108.740"
---

# §108.740. Portfolio diversification (“overline” limitation).

- (a) Without SBA's prior written approval, you may provide Financing or a Commitment to a Small Business only if the resulting amount of your aggregate outstanding Financings and Commitments to such Small Business and its Affiliates does not exceed 10 percent of the sum of:
  - (1) Your Regulatory Capital as of the date of the Financing or Commitment; plus
  - (2) The total amount of leverage projected in your participation agreement with SBA; plus
  - (3) Any permitted Distribution(s) you made during the five years preceding the date of the Financing or Commitment which reduced your Regulatory Capital.
- (b) For the purposes of [paragraph (a)](#a) of this section, you must measure each outstanding Financing at its current cost plus any amount of the Financing that was previously written off.

## Notes

### Amendments

[66 FR 28609, May 23, 2001, as amended at 76 FR 63545, Oct. 12, 2011]

### Authority

Authority: 15 U.S.C. 689-689q.

### Source

Source: 66 FR 28609, May 23, 2001, unless otherwise noted.

### Amendments

[66 FR 28609, May 23, 2001, as amended at 76 FR 63545, Oct. 12, 2011]