Sec. 8. Provision of investment capital for covered business concerns
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Each ownership investment company shall provide a source of debt, synthetic equity, preferred stock, or equity capital, or a combination thereof, for incorporated and unincorporated covered business concerns, in such manner and under such terms as the ownership investment company may fix in accordance with the regulations established by the Department. Before any capital described in subsection
(a)is provided to a covered business concern under this section— the ownership investment company may require a covered business concern to refinance any or all of the outstanding indebtedness of the covered business concern so that the ownership investment company is the only holder of any evidence of indebtedness of the covered business concern; and except as provided in regulations issued by the Secretary, such the covered business concern shall agree that the covered business concern will not thereafter incur any indebtedness without first securing the approval of the ownership investment company and giving the ownership investment company the first opportunity to finance such indebtedness. Investment capital provided to covered business concerns under this section may be provided directly or in cooperation with other investors, incorporated or unincorporated, through agreements to participate on an immediate or deferred basis. The maximum rate of interest for the share of an ownership investment company of any loan made under this section shall be determined by the Secretary— provided that the Department also shall permit those ownership investment companies that have issued debentures pursuant to this Act to charge a maximum rate of interest based upon the coupon rate of interest on the outstanding debentures, determined on an annual basis, plus such other expenses of the ownership investment company as may be approved by the Department; and in making the initial determinations on the maximum rate of interest under this subsection following the enactment of this Act, the Secretary shall consult the regulations promulgated by the Administrator of the Small Business Administration on the maximum rate of interest for loans and debt securities in accordance with section 305 of the Small Business Investment Act of 1958 ( 15 U.S.C. 685 ). Any loan made under this section shall have a maturity not exceeding 20 years. Any ownership investment company that makes a loan to a covered business concern under this section is authorized to extend the maturity of or renew such loan for additional periods, not exceeding 10 years, if the ownership investment company finds that such extension or renewal will aid in the orderly liquidation of such loan. Any loan made under this section shall be of such sound value, or so secured, as reasonably to assure repayment.
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Sec. 8
Provision of investment capital for covered business concerns
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