USC - Capital requirements

§ 682. Capital requirements

(a) Amount

(1) In general

Except as provided in paragraph (2), the private capital of each licensee shall be not less than—

(A) $5,000,000; or

(B) $10,000,000, with respect to each licensee authorized or seeking authority to issue participating securities to be purchased or guaranteed by the Administration under this chapter.

(2) Exception

(3) Adequacy

In addition to the requirements of paragraph (1), the Administrator shall—

(A) determine whether the private capital of each licensee is adequate to assure a reasonable prospect that the licensee will be operated soundly and profitably, and managed actively and prudently in accordance with its articles; and

(B) determine that the licensee will be able 1

1 So in original. Probably should be followed by a comma.

both prior to licensing and prior to approving any request for financing, to make periodic payments on any debt of the company which is interest bearing and shall take into consideration the income which the company anticipates on its contemplated investments, the experience of the company’s owners and managers, the history of the company as an entity, if any, and the company’s financial resources.

(4) Exemption from capital requirements

The Administrator may, in the discretion of the Administrator, approve leverage for any licensee licensed under subsection (c) or (d) of section 681 of this title before September 30, 1996, that does not meet the capital requirements of paragraph (1), if—

(A) the licensee certifies in writing that not less than 50 percent of the aggregate dollar amount of its financings after September 30, 1996, will be provided to smaller enterprises; and

(B) the Administrator determines that such action would not create or otherwise contribute to an unreasonable risk of default or loss to the United States Government.

(b) Financial institution investments

(1) Certain banks

(2) Certain savings associations

(Pub. L. 85–699, title III, § 302, Aug. 21, 1958, 72 Stat. 692; Pub. L. 86–502, § 5, June 11, 1960, 74 Stat. 196; Pub. L. 87–341, § 3, Oct. 3, 1961, 75 Stat. 752; Pub. L. 88–273, § 2, Feb. 28, 1964, 78 Stat. 146; Pub. L. 90–104, title II, §§ 203(a), 204, Oct. 11, 1967, 81 Stat. 269, 270; Pub. L. 94–305, title I, §§ 106(e), 107, June 4, 1976, 90 Stat. 666; Pub. L. 95–89, title II, § 210, Aug. 4, 1977, 91 Stat. 558; Pub. L. 95–507, title I, § 105, Oct. 24, 1978, 92 Stat. 1758; Pub. L. 102–366, title IV, §§ 406(a), 409, Sept. 4, 1992, 106 Stat. 1015, 1017; Pub. L. 104–208, div. D, title II, § 208(c), Sept. 30, 1996, 110 Stat. 3009–742; Pub. L. 105–135, title II, § 215(a), Dec. 2, 1997, 111 Stat. 2601; Pub. L. 106–554, § 1(a)(9) [title IV, § 403], Dec. 21, 2000, 114 Stat. 2763, 2763A–690.)