13 C.F.R. § 107.1505 Liquidity requirements for Licensees issuing Participating Securities.
Title 13 - Business Credit and Assistance
If you have outstanding Participating Securities, you must maintain sufficient liquidity to avoid a condition of Liquidity Impairment. Such a condition will constitute noncompliance with the terms of your Leverage under §107.1820(e). (a) Definition of Liquidity Impairment. A condition of Liquidity Impairment exists when your Liquidity Ratio, as determined in paragraph (b) of this section, is less than 1.20. You are responsible for calculating whether you have a condition of Liquidity Impairment: (1) As of the close of your fiscal year; (2) At the time you apply for Leverage, unless SBA permits otherwise; and (3) At such time as you contemplate making any Distribution. (b) Computation of Liquidity Ratio. Your Liquidity Ratio equals your Total Current Funds Available (A) divided by your Total Current Funds Required (B), as determined in the following table: [61 FR 3189, Jan. 31, 1996, as amended at 63 FR 5869, Feb. 5, 1998]
Title 13: Business Credit and Assistance
PART 107—SMALL BUSINESS INVESTMENT COMPANIES
Subpart I—SBA Financial Assistance for Licensees (Leverage)
Participating Securities Leverage
§ 107.1505 Liquidity requirements for Licensees issuing Participating Securities.
Calculation of Liquidity Ratio------------------------------------------------------------------------ Amount Financial account reported on Weight Weighted SBA form 468 amount------------------------------------------------------------------------(1) Cash and invested idle .............. x1.00 .............. funds.(2) Commitments from .............. x1.00 .............. investors.(3) Current maturities....... .............. x0.50 ..............(4) Other current assets..... .............. x1.00 ..............(5) Publicly Traded and .............. x1.00 .............. Marketable Securities.(6) Anticipated operating (1) x1.00 .............. revenue for next 12 months.(7) Total Current Funds .............. ......... A Available.(8) Current liabilities...... .............. x1.00 ..............(9) Commitments to Small .............. x0.75 .............. Businesses.(10) Anticipated operating (1) x1.00 .............. expense for next 12 months.(11) Anticipated interest (1) x1.00 .............. expense for next 12 months.(12) Contingent liabilities .............. x0.25 .............. (guarantees).(13) Total Current Funds .............. ......... B Required.------------------------------------------------------------------------\1\ As determined by Licensee's management under its business plan.
