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15 U.S.C. § 684 — Equity capital for small-business concerns
Federal law — U.S. Code and appendices · legal_authorities
Page 1099
TITLE 15—COMMERCE AND TRADE
§ 685
‘‘(i) UNIFORM APPLICABILITY.—Any regulation issued
by the Administration to implement section 303(e) of
the Small Business Investment Act of 1958 [15 U.S.C.
683(e)] that applies to any licensee with outstanding le-
verage obtained before the effective date of that regula-
tion, shall apply uniformly to all licensees with out-
standing leverage obtained before that effective date.
‘‘(ii) DEFINITIONS.—For purposes of this subparagraph,
the terms ‘Administration’, ‘leverage’ and ‘licensee’
have the same meanings as in section 103 of the Small
Business Investment Act of 1958 [15 U.S.C. 662].’’
EFFECT OF SMALL BUSINESS EQUITY ENHANCEMENT ACT
OF 1992 ON SECURITIES LAWS
Nothing in amendment by Pub. L. 102–366 to be con-
strued to affect applicability of securities laws or to
otherwise supersede or limit jurisdiction of Securities
and Exchange Commission, see section 418 of Pub. L.
102–366, set out as a note under section 661 of this title.
§ 684. Equity capital for small-business concerns
(a) Function of investment companies
It shall be a function of each small business
investment company to provide a source of eq-
uity capital for incorporated and unincorporated
small-business concerns, in such manner and
under such terms as the small business invest-
ment company may fix in accordance with the
regulations of the Administration.
(b) Conditions
Before any capital is provided to a small-busi-
ness concern under this section—
(1) the company may require such concern to
refinance any or all of its outstanding indebt-
edness so that the company is the only holder
of any evidence of indebtedness of such con-
cern; and
(2) except as provided in regulations issued
by the Administration, such concern shall
agree tha
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Page 1099
TITLE 15—COMMERCE AND TRADE
§ 685
‘‘(i) UNIFORM APPLICABILITY.—Any regulation issued
by the Administration to implement section 303(e) of
the Small Business Investment Act of 1958 [15 U.S.C.
683(e)] that applies to any licensee with outstanding le-
verage obtained before the effective date of that regula-
tion, shall apply uniformly to all licensees with out-
standing leverage obtained before that effective date.
‘‘(ii) DEFINITIONS.—For purposes of this subparagraph,
the terms ‘Administration’, ‘leverage’ and ‘licensee’
have the same meanings as in section 103 of the Small
Business Investment Act of 1958 [15 U.S.C. 662].’’
EFFECT OF SMALL BUSINESS EQUITY ENHANCEMENT ACT
OF 1992 ON SECURITIES LAWS
Nothing in amendment by Pub. L. 102–366 to be con-
strued to affect applicability of securities laws or to
otherwise supersede or limit jurisdiction of Securities
and Exchange Commission, see section 418 of Pub. L.
102–366, set out as a note under section 661 of this title.
§ 684. Equity capital for small-business concerns
(a) Function of investment companies
It shall be a function of each small business
investment company to provide a source of eq-
uity capital for incorporated and unincorporated
small-business concerns, in such manner and
under such terms as the small business invest-
ment company may fix in accordance with the
regulations of the Administration.
(b) Conditions
Before any capital is provided to a small-busi-
ness concern under this section—
(1) the company may require such concern to
refinance any or all of its outstanding indebt-
edness so that the company is the only holder
of any evidence of indebtedness of such con-
cern; and
(2) except as provided in regulations issued
by the Administration, such concern shall
agree that it will not thereafter incur any in-
debtedness without first securing the approval
of the company and giving the company the
first opportunity to finance such indebtedness.
(c) Repealed. Pub. L. 90–104, title II, § 206, Oct.
11, 1967, 81 Stat. 271
(d) Direct or cooperative provision of capital
Equity capital provided to incorporated small
business concerns under this section may be pro-
vided directly or in cooperation with other in-
vestors,
incorporated
or
unincorporated,
through agreements to participate on an imme-
diate basis.
(Pub. L. 85–699, title III, § 304, Aug. 21, 1958, 72
Stat. 693; Pub. L. 86–502, § 6, June 11, 1960, 74
Stat. 196; Pub. L. 87–341, § 5, Oct. 3, 1961, 75 Stat.
752; Pub. L. 90–104, title II, § 206, Oct. 11, 1967, 81
Stat. 271; Pub. L. 92–595, § 2(e), Oct. 27, 1972, 86
Stat. 1316.)
Editorial Notes
AMENDMENTS
1972—Subsec. (a). Pub. L. 92–595 extended the function
of small business investment companies to provide a
source of equity capital to unincorporated business
concerns.
1967—Subsec. (c). Pub. L. 90–104 repealed subsec. (c)
which authorized purchase of stock of investment com-
panies by small-business concerns in an amount equal
to 5 per centum of capital provided.
1961—Subsec. (d). Pub. L. 87–341 added subsec. (d).
1960—Subsec. (a). Pub. L. 86–502 struck out ‘‘primary’’
before ‘‘function’’, and substituted ‘‘a source of equity
capital for incorporated small-business concerns, in
such manner and under such terms as the small busi-
ness investment company may fix in accordance with
the regulations of the Administration’’ for ‘‘a source of
needed equity capital for small-business concerns in
the manner and subject to the conditions described in
this section’’.
Subsec. (b). Pub. L. 86–502 redesignated subsec. (c) as
(b), and repealed former subsec. (b) which required cap-
ital to be secured only through the purchase of deben-
ture bonds.
Subsecs. (c), (d). Pub. L. 86–502 redesignated subsec.
(d) as (c), and substituted ‘‘such concern shall have the
right, exercisable in whole or in such part as such con-
cern may elect, to become a stockholder-proprietor by
investing in the capital stock of the company 5 per cen-
tum’’ for ‘‘such concern shall be required to become a
stockholder-proprietor of the company by investing in
the capital stock of the company, in an amount equal
to not less than 2 percent nor more than 5 percent’’.
Former subsec. (c) redesignated (b).
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 1967 AMENDMENT
Amendment by Pub. L. 90–104 effective 90 days after
Oct. 11, 1967, see section 211 of Pub. L. 90–104, set out as
a note under section 681 of this title.
§ 685. Long-term loans to small-business concerns
(a) Authorization
Each company is authorized to make loans, in
the manner and subject to the conditions de-
scribed in this section, to incorporated and un-
incorporated small-business concerns in order to
provide such concerns with funds needed for
sound financing, growth, modernization, and ex-
pansion.
(b) Direct loans; loans on participation basis
Loans made under this section may be made
directly or in cooperation with other lenders, in-
corporated or unincorporated, through agree-
ments to participate on an immediate or de-
ferred basis.
(c) Maximum rate of interest
The maximum rate of interest for the com-
pany’s share of any loan made under this section
shall be determined by the Administration: Pro-
vided, That the Administration also shall permit
those companies which have issued debentures
pursuant to this chapter to charge a maximum
rate of interest based upon the coupon rate of
interest on the outstanding debentures, deter-
mined on an annual basis, plus such other ex-
penses of the company as may be approved by
the Administration.
(d) Maturity
Any loan made under this section shall have a
maturity not exceeding twenty years.
(e) Soundness of loan; security
Any loan made under this section shall be of
such sound value, or so secured, as reasonably to
assure repayment.
(f) Extension or renewal
Any company which has made a loan to a
small-business concern under this section is au-
thorized to extend the maturity of or renew such
loan for additional periods, not exceeding ten
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Federal law — U.S. Code and appendices · legal_authorities
As used in this chapter—
(1) the term “Administration” means the Small Business Administration;
(2) the term “Administrator” means the Administrator of the Small Business Administration;
(3) the terms “small business investment company”, “company”, and “licensee” mean a company approved by the Administration to operate under the provisions of this chapter and issued a license as provided in [section 681 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section681&num=0&edition=prelim);
(4) the term “State” includes the several States, the territories and possessions of the United States, the Commonwealth of Puerto Rico, and the District of Columbia;
(5) the term “small-business concern” shall have the same meaning as in the Small Business Act [[15 U.S.C. 631](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section631&num=0&edition=prelim) et seq.], except that, for purposes of this chapter—
(A) an investment by a venture capital firm, investment company (including a small business investment company) employee welfare benefit plan or pension plan, or trust, foundation, or endowment that is exempt from Federal income taxation—
(i) shall not cause a business concern to be deemed not independently owned and operated regardless of the allocation of control during the investment period under any investment agreement between the business concern and the entity making the investment;
(ii) shall be disregarded in determining whether a business concern satisfies size standards established pursuant to section 3(a)(2) of the Small Business Act [[15 U.S.C. 632(a)(2)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section632/a/2&num=0&edition=prelim)]; and
(iii) shall be disregarded in
Source: Supplied U.S. Code snapshot — release unconfirmed · 15 U.S.C. § 662
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Federal law — U.S. Code and appendices · legal_authorities
Page 1084
TITLE 15—COMMERCE AND TRADE
§ 662
§ 662. Definitions
As used in this chapter—
(1) the term ‘‘Administration’’ means the
Small Business Administration;
(2) the term ‘‘Administrator’’ means the Ad-
ministrator of the Small Business Administra-
tion;
(3) the terms ‘‘small business investment
company’’, ‘‘company’’, and ‘‘licensee’’ mean a
company approved by the Administration to
operate under the provisions of this chapter
and issued a license as provided in section 681
of this title;
(4) the term ‘‘State’’ includes the several
States, the territories and possessions of the
United States, the Commonwealth of Puerto
Rico, and the District of Columbia;
(5) the term ‘‘small-business concern’’ shall
have the same meaning as in the Small Busi-
ness Act [15 U.S.C. 631 et seq.], except that, for
purposes of this chapter—
(A) an investment by a venture capital
firm, investment company (including a
small business investment company) em-
ployee welfare benefit plan or pension plan,
or trust, foundation, or endowment that is
exempt from Federal income taxation—
(i) shall not cause a business concern to
be deemed not independently owned and
operated regardless of the allocation of
control
during
the
investment
period
under any investment agreement between
the business concern and the entity mak-
ing the investment;
(ii) shall be disregarded in determining
whether a business concern satisfies size
standards established pursuant to section
3(a)(2) of the Small Business Act [15 U.S.C.
632(a)(2)]; and
(iii) shall be disregarded in determining
whether a small business concern is a
smaller enterprise; and
(B) in determining whether a business con-
cern satisfies net income standards estab-
lished pursuant to section 3(a)(2) of the
Small Busin
Source: Supplied 2024 U.S. Code historical extraction · 15 U.S.C. § 662
Stored review status: historical_2024_not_currentness_verified. The source passage cites 15 U.S.C. § 662. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Authority to issue obligations** Each small business investment company shall have authority to borrow money and to issue its securities, promissory notes, or other obligations under such general conditions and subject to such limitations and regulations as the Administration may prescribe.
**(b) Debentures and participating securities** To encourage the formation and growth of small business investment companies the Administration is authorized when authorized in appropriation Acts, to purchase, or to guarantee the timely payment of all principal and interest as scheduled on, debentures or participating securities issued by such companies. Such purchases or guarantees may be made by the Administration on such terms and conditions as it deems appropriate, pursuant to regulations issued by the Administration. The full faith and credit of the United States is pledged to the payment of all amounts which may be required to be paid under any guarantee under this subsection. Debentures purchased or guaranteed by the Administration under this subsection shall be subordinate to any other debenture bonds, promissory notes, or other debts and obligations of such companies, unless the Administration in its exercise of reasonable investment prudence and in considering the financial soundness of such company determines otherwise. Such debentures may be issued for a term of not to exceed fifteen years and shall bear interest at a rate not less than a rate determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities on such debentures, adjusted to the nearest one-eighth of 1 percent, plus, for debentures obl
Source: Supplied U.S. Code snapshot — release unconfirmed · 15 U.S.C. § 683
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Federal law — U.S. Code and appendices · legal_authorities
Page 1091
TITLE 15—COMMERCE AND TRADE
§ 683
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 an-
ticipates on its contemplated investments, the experi-
ence of the company’s owners and managers, the his-
tory of the company as an entity, if any, and the com-
pany’s financial resources.’’
1978—Subsec. (a). Pub. L. 95–507 provided that the
combined private paid-in capital and paid-in surplus of
any company licensed on or after Oct. 1, 1979 pursuant
to section 681(c) and (d) of this title would not be less
than $500,000.
1977—Subsec. (b). Pub. L. 95–89 inserted ‘‘and’’ be-
tween ‘‘capital’’ and ‘‘surplus’’.
1976—Subsec. (a). Pub. L. 94–305, § 106(e), struck out
‘‘of incorporation’’ after ‘‘its articles’’.
Subsec. (b). Pub. L. 94–305, § 107, struck out provisions
prohibiting the bank from acquiring shares in a small
business investment company if the bank would hold 50
percent or more of any class of equity securities issued
by that investment company and having actual or po-
tential voting rights.
1967—Subsec. (a). Pub. L. 90–104, § 203(a), substituted
small business investment company minimum capital
requirement, a combined private paid-in capital and
paid-in surplus, of $150,000 and adequate to assure rea-
sonable prospect of sound and profitable company oper-
ations and active and prudent management in accord-
ance with the articles of incorporation for former re-
quirement of a paid-in capital and surplus equal to at
least $300,000, and eliminated provisions for purchase of
debentures of such companies in an amount not to ex-
ceed the lesser of $700,000 or the amount of paid-in cap-
ital a
Source: Supplied 2024 U.S. Code historical extraction · 15 U.S.C. § 683
Stored review status: historical_2024_not_currentness_verified. The source passage cites 15 U.S.C. § 683. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Function of investment companies** It shall be a function of each small business investment company to provide a source of equity capital for incorporated and unincorporated small-business concerns, in such manner and under such terms as the small business investment company may fix in accordance with the regulations of the Administration.
**(b) Conditions** Before any capital is provided to a small-business concern under this section—
(1) the company may require such concern to refinance any or all of its outstanding indebtedness so that the company is the only holder of any evidence of indebtedness of such concern; and
(2) except as provided in regulations issued by the Administration, such concern shall agree that it will not thereafter incur any indebtedness without first securing the approval of the company and giving the company the first opportunity to finance such indebtedness.
**(c) Repealed. Pub. L. 90–104, title II, § 206, Oct. 11, 1967, 81 Stat. 271**
**(d) Direct or cooperative provision of capital** Equity capital provided to incorporated small 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 basis.
Source: Supplied U.S. Code snapshot — release unconfirmed · 15 U.S.C. § 684
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