Title 13

SECTION 108.740

108.740 Portfolio diversification (“overline” limitation).

§ 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) of this section, you must measure each outstanding Financing at its current cost plus any amount of the Financing that was previously written off.

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

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