Sec. 302. capital requirements2
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/statute-compilations/comps-1835/sec-302A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
## Sec. 302 capital requirements2 **[**[15 U.S.C. 682](/us/usc/t15/s682)**]** ###
(a)Amount ####
(1)In general Except as provided in paragraph (2), the private capital of each licensee shall be not less than— 2So in law. Probably should read **“SEC. 302. CAPITAL REQUIREMENTS.”**. #####
(A)$5,000,000; or #####
(B)$10,000,000, with respect to each licensee authorized or seeking authority to issue participating securities to be purchased or guaranteed by the Administration under this Act. ####
(2)Exception The Administrator may, in the discretion of the Administrator and based on a showing of special circumstances and good cause, permit the private capital of a licensee authorized or seeking authorization to issue participating securities to be purchased or guaranteed by the Administration to be less than $10,000,000, but not less than $5,000,000, if the Administrator determines that such action would not create or otherwise contribute to an unreasonable risk of default or loss to the Federal Government. ####
(3)Adequacy In addition to the requirements of paragraph (1), the Administrator shall— #####
(A)determine whether the private capital of each licensee is adequate to assure a reasonable prospect that the licensee will be operated soundly and profitably, and managed actively and prudently in accordance with its articles; and #####
(B)determine that the licensee will be able3 both prior to licensing and prior to approving any request for financing, to make periodic payments on any debt of the company which is interest bearing and shall take into consideration the income which the company anticipates on its contemplated investments, the experience of the company's owners and managers, the history of the company as an entity, if any, and the company's financial resources. 3So in law. A comma should appear after the phrase “will be able”. See amendment made by section 208(c)(1) of division D of Public Law 104–208 (110 Stat. 3009–742). ####
(4)Exemption from capital requirements The Administrator may, in the discretion of the Administrator, approve leverage for any licensee licensed under subsection
(c)or
(d)of section 301 before the date of enactment of the Small Business Program Improvement Act of 1996 that does not meet the capital requirements of paragraph (1), if— #####
(A)the licensee certifies in writing that not less 50 percent of the aggregate dollar amount of its financings after the date of enactment of the Small Business Program Improvement Act of 1996 will be provided to smaller enterprises; and #####
(B)the Administrator determines that such action would not create or otherwise contribute to an unreasonable risk of default or loss to the United States Government. ###
(b)Financial Institution Investments ####
(1)Certain banks Notwithstanding the provisions of section 6(a)(1) of the Bank Holding Company Act of 1956, any national bank, or any member bank of the Federal Reserve System or nonmember insured bank to the extent permitted under applicable State law, may invest in any 1 or more small business investment companies, or in any entity established to invest solely in small business investment companies, except that in no event shall the total amount of such investments of any such bank exceed 5 percent of the capital and surplus of the bank. ####
(2)Certain savings associations Notwithstanding any other provision of law, any Federal savings association may invest in any one or more small business investment companies, or in any entity established to invest solely in small business investment companies, except that in no event may the total amount of such investments by any such Federal savings association exceed 5 percent of the capital and surplus of the Federal savings association. ###
(c)Diversification of Ownership The Administrator shall ensure that the management of each licensee licensed after the date of enactment of the Small Business Program Improvement Act of 1996 is sufficiently diversified from and unaffiliated with the ownership of the licensee in a manner that ensures independence and objectivity in the financial management and oversight of the investments and operations of the licensee.
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- Pub. L. 104-208
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