§ 4290.700 - Requirements concerning types of Enterprises to receive Financing.

§ 4290.700 Requirements concerning types of Enterprises enterprises to receive Financingfinancing.

(a) Rural Business Concern Investments. At the Financing requirements. Beginning after the third fiscal year after the issuance of your RBIC license and at the close of each of your fiscal years -

(1)

thereafter, you must be in compliance with the Financing percentages specified in this paragraph (a).

(1) Rural Business Concerns. At least 75 percent of your Portfolio Concerns must have received a Rural Business Concern Investment; and

(2) For all

Financings

you have extended, you must have invested at least 75 percent

(in total dollars)

in

to your Portfolio Concerns must have been to Rural Business

Concern Investments

Concerns.

(

b

2)Smaller

Enterprise Investments. At the close of each of your fiscal years - (1)

Enterprises. More than 50 percent of your Financings (in total dollars) to your Portfolio Concerns must

be

have been to Smaller Enterprises that, at the time of the initial Financing to such Enterprise, meet either the net worth/net income test or the size standard set forth in the “Smaller Enterprise” definition in § 4290.50

of this part; and

(2) For all Financings that you have extended, you must have invested more than 50 percent (in total dollars) in Financings in the form of Equity Capital in such Enterprises.

(c) Small Business Concern Investments. At the close of each of your fiscal years -

(1) At least 50 percent of the Portfolio Concerns referenced in paragraph (b)(1) of this section must be Small Business Concerns; and

(2) For all Financings referenced in paragraph (b)(2) of this section, you must have invested at least 50 percent (in total dollars) in Small Business Concerns.

(d) Urban Area Investments. At the close of each of your fiscal years -

(1) No more than 10 percent of your Portfolio Concerns must have received Urban Area Investments; and

(2) For all Financings you have extended, you must not have invested more than 10 percent (in total dollars) in Urban Area Investments.

(e) Non-compliance with this section. If you have not met the percentages required in paragraphs (a), (b), (c), or (d)

.

(3) Urban Areas. No more than 10 percent of your Financings (in total dollars) to your Portfolio Concerns must have been made to Portfolio Concerns located in an Urban Area.

(b) Non-compliance. If you are not in compliance with any of the Financing percentages specified in paragraph (a) of this section at the end of the third fiscal year after the issuance of your RBIC license or any fiscal year thereafter,

then

you must

be in

come into compliance by the end of the following fiscal year.

However

For as long as you remain out of compliance, you

will

are not

be

eligible for additional Leverage

until such time as you meet the required percentages

(see § 4290.1120).

[85 FR 16523, Mar. 24, 2020]