Title 7

SECTION 4290.860

4290.860 Financing fees and expense reimbursements a RBIC may receive from an Enterprise.

§ 4290.860 Financing fees and expense reimbursements a RBIC may receive from an Enterprise.

(a) General rule. You may collect Financing fees and receive expense reimbursements from an Enterprise only as permitted under this § 4290.860.

(b) Application fee. You may collect a nonrefundable application fee from an Enterprise to review its Financing application. The application fee may be collected at the same time as the closing fee under paragraph (d) or (e) of this section, or earlier. The fee must be:

(1) No more than one percent of the amount of Financing requested (or, if two or more RBICs participate in the Financing, their combined application fees are no more than one percent of the total Financing requested); and

(2) Agreed to in writing by the Financing applicant.

(c) The Agency's review of application fees. For any fiscal year, if the number of application fees you collect is more than twice the number of Financings closed, the Agency in its sole discretion may determine that you are engaged in activities not contemplated by the Act, in violation of § 4290.500.

(d) Closing fee - Loans. You may charge a closing fee on a Loan if:

(1) The fee is no more than two percent of the Financing amount (or, if two or more RBICs participate in the Financing, their combined closing fees are no more than two percent of the total Financing amount); and

(2) You charge the fee no earlier than the date of the first disbursement.

(e) Closing fee - Debt or Equity Financings. You may charge a Closing Fee on a Debt Security or Equity Security Financing if:

(1) The fee is no more than four percent of the Financing amount (or, if two or more RBICs participate in the Financing, their combined closing fees are no more than four percent of the total Financing amount); and

(2) You charge the fee no earlier than the date of the first disbursement.

(f) Limitation on dual fees. If another RBIC or an Associate of yours collects a transaction fee under § 4290.900(e) in connection with your Financing of an Enterprise, the sum of the transaction fee and your application and closing fees cannot exceed the maximum application and closing fees permitted under this § 4290.860.

(g) Expense reimbursements. You may charge an Enterprise for the reasonable out-of-pocket expenses, other than Management Expenses, that you incur to process its Financing application. If the Agency determines that any of your reimbursed expenses are unreasonable or are Management Expenses, the Agency will require you to refund them to the Enterprise.

(h) Breakup fee. If an Enterprise accepts your Commitment and then fails to close the Financing because it has accepted funds from another source, you may charge a “breakup fee” equal to the closing fee that you would have been permitted to charge under paragraph (d) or (e) of this section.

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