13 C.F.R. Subpart N—Requirements and Procedures for Operational Assistance Grants to NMVC Companies and SSBICs
Title 13 - Business Credit and Assistance
(a) NMVC Companies. Regulations governing Operational Assistance grants to NMVC Companies may be found in subparts D and E of this part 108, and in §§108.2010 through 108.2040. (b) SSBICs. Regulations governing Operational Assistance grants to SSBICs may be found in §§108.2001 through 108.2040. [67 FR 68503, Nov. 12, 2002] (a) Notice of Funds Availability (“NOFA”). SBA will publish a NOFA in the (b) Application form. An SSBIC must apply for an Operational Assistance grant using the application packet provided by SBA. Upon receipt of an application, SBA may request clarifying or technical information on the materials submitted as part of the application. [67 FR 68503, Nov. 12, 2002] An SSBIC is eligible to apply for an Operational Assistance grant if: (a) It intends to increase its Regulatory Capital, as in effect on December 21, 2000, and to make Low-Income Investments in the amount of such increase; (b) It intends to raise binding commitments for contributions in cash or in-kind, and/or to purchase an annuity, in an amount not less than 30 percent of the intended increase in its Regulatory Capital described in paragraph (a) of this section; and (c) It has a plan describing how it intends to use the requested grant funds to provide Operational Assistance to Smaller Enterprises in which it has made or expects to make Low-Income Investments after December 21, 2000. [67 FR 68503, Nov. 12, 2002] An SSBIC must pay to SBA a grant issuance fee of $5,000. An SSBIC must submit this fee in advance, at the time of application submission. If SBA does not award a grant to the SSBIC, SBA will refund this fee to the SSBIC. [67 FR 68503, Nov. 12, 2002] Each application submitted by an SSBIC for an Operational Assistance grant must contain the information specified in the application packet provided by SBA, including the following information: (a) Amounts. An SSBIC must specify the amount of Regulatory Capital it intends to raise after December 21, 2000, and the amount of Operational Assistance grant funds it seeks from SBA, which must be at least 30 percent of its intended increase in its Regulatory Capital since December 21, 2000. (b) Plan. An SSBIC must submit a plan addressing the specific items described in §108.2005. [67 FR 68503, Nov. 12, 2002] (a) Plan for providing Operational Assistance. The SSBIC must describe how it plans to use its grant funds to provide Operational Assistance to Smaller Enterprises in which it will make Low-Income Investments. Its plan must address the types of Operational Assistance it proposes to provide, and how it plans to provide the Operational Assistance through the use of licensed professionals, when necessary, either from its own staff or from outside entities. (b) Matching resources for Operational Assistance grant. The SSBIC must include a detailed description of how it plans to obtain binding commitments for contributions in cash or in-kind, and/or to purchase an annuity, to match the funds requested from SBA for the SSBIC's Operational Assistance grant. If it proposes to obtain commitments for cash and in-kind contributions, it also must estimate the ratio of cash to in-kind contributions (in no event may in-kind contributions exceed 50 percent of the total contributions). The SSBIC must discuss its potential sources of matching resources, the estimated timing on raising such match, and the extent of the expressions of interest to commit such match to the SSBIC. (c) Identification of LI Areas. The SSBIC must identify the specific LI Areas in which it intends to make Low-Income Investments and provide Operational Assistance under the NMVC program. (d) Projected allocation of investments among identified LI Areas. The SSBIC must describe the amount of Low-Income Investments it intends to make in each of the identified LI Areas. (e) Track record of management team in obtaining public policy results through investments. The SSBIC must provide information concerning the past track record of the SSBIC in making investments that have had a demonstrable impact on the socially or economically disadvantaged businesses targeted by the SSBIC program (for example, new businesses created, jobs created, or wealth created). Such information might include case studies or examples of the SSBIC's successful Financings. (f) Market analysis. The SSBIC must provide an analysis of the LI Areas in which it intends to makes its Low-Income Investments and provide its Operational Assistance to Smaller Enterprises, demonstrating that the SSBIC understands the market and the unmet capital needs in such areas and how its activities will meet these unmet capital needs through Low-Income Investments and have a positive economic impact on those areas. The analysis must include a description of the extent of the economic distress in the identified LI Areas. The SSBIC also must analyze the extent of the demand in such areas for Low-Income Investments and any factors or trends that may affect the SSBIC's ability to make effective Low-Income Investments. (g) Regulatory Capital. The SSBIC must include a detailed description of how it plans to raise its Regulatory Capital. The SSBIC must discuss its potential sources of Regulatory Capital, the estimated timing on raising such funds, and the extent of the expressions of interest to commit such funds to the SSBIC. (h) Projected impact. The SSBIC must describe the criteria and economic measurements to be used to evaluate whether and to what extent it has met the objectives of the NMVC program. It must include: (1) An estimate of the social, economic, and community development benefits to be created within identified LI Areas over the next five years or more as a result of its activities; (2) A description of the criteria to be used to measure the benefits created as a result of its activities; and (3) A discussion about the amount of such benefits created that it will consider to constitute successfully meeting the objectives of the NMVC program. [67 FR 68503, Nov. 12, 2002] SBA will evaluate and select an SSBIC for an Operational Assistance grant award under the NMVC program solely at SBA's discretion, based on SBA's review of the SSBIC's application materials, interviews or site visits with the SSBIC (if any), and information in SBA's records relating to the SSBIC's regulatory compliance status and track record as an SSBIC. SBA's evaluation and selection process is intended to ensure that SSBIC requests are evaluated on a competitive basis and in a fair and consistent manner. SBA will evaluate and select SSBICs for an Operational Assistance grant award by considering the following criteria: (a) The strength of the SSBIC's application, including the strength of its proposal to provide Operational Assistance to Smaller Enterprises in which it intends to invest; (b) The SSBIC's regulatory compliance status and past track record in being able to accomplish program goals through its investment activity; (c) The likelihood that and the time frame within which the SSBIC will be able to raise the Regulatory Capital it intends to raise and obtain the matching resources described in §108.2005(b) and (g); (d) The need for Low-Income Investments in the LI Areas in which the SSBIC intends to invest; (e) The SSBIC's demonstrated understanding of the markets in the LI Areas in which it intends to invest; (f) The extent to which the activities proposed by the SSBIC will promote economic development and the creation of wealth and job opportunities in the LI Areas in which it intends to invest and among individuals living in LI Areas; (g) The likelihood that the SSBIC will fulfill the goals described in its application and meet the objectives of the NMVC program; and (h) The strength of the SSBIC's application compared to applications submitted by other SSBICs and by Applicants intending to invest in the same or proximate LI Areas. [67 FR 68503, Nov. 12, 2002] An SSBIC selected for an Operational Assistance grant award will receive a grant award only if, by a date established by SBA, it increases its Regulatory Capital in the specific amount set forth in its application, pursuant to §108.2004(a), and raises matching resources for the grant in the amount required by §108.2030(d)(2). [67 FR 68503, Nov. 12, 2002] (a) Restrictions applicable only to SSBICs. An SSBIC that receives an Operational Assistance grant must use both grant funds awarded by SBA and its matching resources only to provide Operational Assistance in connection with a Low-Income Investment made by the SSBIC with Regulatory Capital raised after December 21, 2000. (b) Restrictions applicable only to NMVC Companies. A NMVC Company must use at least 80 percent of both grant funds awarded by SBA and its matching resources to provide Operational Assistance to Smaller Enterprises whose Principal Office at the time the Operational Assistance commences is located in an LI Area. (c) Restrictions applicable to NMVC Companies and SSBICs. A NMVC Company or a SSBIC that receives an Operational Assistance grant must not use either grant funds awarded by SBA or its matching resources for “general and administrative expense,” as defined in the Federal Acquisition Regulations, “Definitions of Words and Terms,” 48 CFR 2.101. [66 FR 28609, May 23, 2001; 66 FR 32894, June 19, 2001, as amended at 67 FR 68505, Nov. 12, 2002] (a) Amount of grant to NMVC Company. NMVC Companies are eligible for an Operational Assistance grant award equal to the amount of matching resources raised by the NMVC Company in accordance with §§108.380(a)(1)(i)(B) and 108.2030. (b) Amount of grant to SSBIC. SSBICs are eligible for an Operational Assistance grant award equal to the amount of matching resources raised by the SSBIC in accordance with §§108.2007 and 108.2030. (c) Pro rata reductions. In the event that the total amount of funds available to SBA for purposes of making Operational Assistance grant awards to NMVC Companies and SSBICs is not sufficient to award grants in the amounts described in paragraphs (a) and (b) of this section, SBA will make pro rata reductions in the amounts otherwise awarded to each such NMVC Company and SSBIC. [66 FR 28609, May 23, 2001, as amended at 67 FR 68505, Nov. 12, 2002] (a) General. All Operational Assistance grant funds SBA awards to an NMVC Company or a SSBIC must be matched on a dollar for dollar basis with funds or other resources raised by the NMVC Company or SSBIC. (b) Allowable sources. (1) Any source other than SBA is an allowable source of matching resources for an Operational Assistance grant award. (2) Neither a NMVC Company nor a SSBIC may use funds or other resources that it has used to satisfy a legal requirement for obtaining funds under any other Federal program, to satisfy the matching resources requirements described in this part. (3) A portion of Private Capital may be designated as matching resources if the designated funds are used to purchase an annuity pursuant to paragraph (c)(2)(iv) of this section or are otherwise segregated in a manner acceptable to SBA. (c) Type and form of matching resources. (1) Matching resources may come from cash contributions or in-kind contributions. In-kind contributions cannot exceed 50 percent of the total amount of match raised by the NMVC Company or SSBIC. (2) Matching resources may be in the form of: (i) Cash; (ii) In-kind contributions; (iii) Binding commitments for cash or in-kind contributions that may be payable over a multiyear period acceptable to SBA (but not to exceed the term of the Operational Assistance grant from SBA and in no event more than 10 years); and/or (iv) An annuity, purchased with funds other than Regulatory Capital, from an insurance company acceptable to SBA and that may be payable over a multiyear period acceptable to SBA (but not to exceed the term of the Operational Assistance grant from SBA and in no event more than 10 years). (d) Amount of matching resources—(1) NMVC Companies. The amount of matching resources required of an NMVC Company is set forth in §108.380(a)(1)(i)(B). (2) SSBICs. The amount of matching resources required of an SSBIC is equal to the amount of Operational Assistance grant funds requested by the SSBIC, as set forth in its application pursuant to §108.2004(a). [66 FR 28609, May 23, 2001, as amended at 67 FR 68505, Nov. 12, 2002] (a) NMVC Companies. Policies governing reporting, record retention, and recordkeeping requirements applicable to NMVC Companies may be found in subpart H of this part. NMVC Companies also must comply with all reporting, record retention, and recordkeeping requirements set forth in Circular A–110 of the Office of Management and Budget (for availability, see 5 CFR 1310.3) and any grant award document executed between SBA and the NMVC Company. (b) SSBICs. An SSBIC receiving an Operational Assistance grant award must comply with all reporting, record retention and recordkeeping requirements set forth in Circular A–110 of the Office of Management and Budget and any grant award document executed between SBA and the SSBIC, as well as the reporting requirements in §108.630(f) and the filing requirement in §108.640. [66 FR 28609, May 23, 2001, as amended at 67 FR 68505, Nov. 12, 2002]
Title 13: Business Credit and Assistance
PART 108—NEW MARKETS VENTURE CAPITAL (“NMVC”) PROGRAM
Subpart N—Requirements and Procedures for Operational Assistance Grants to NMVC Companies and SSBICs
§ 108.2000 Operational Assistance Grants to NMVC Companies and SSBICs.
§ 108.2001 When and how SSBICs may apply for Operational Assistance grants.
§ 108.2002 Eligibility of SSBICs to apply for Operational Assistance grants.
§ 108.2003 Grant issuance fee for SSBICs.
§ 108.2004 Contents of application submitted by SSBICs.
§ 108.2005 Contents of plan submitted by SSBICs.
§ 108.2006 Evaluation and selection of SSBICs.
§ 108.2007 Grant award to SSBICs.
§ 108.2010 Restrictions on use of Operational Assistance grant funds.
§ 108.2020 Amount of Operational Assistance grant.
§ 108.2030 Matching requirements.
§ 108.2040 Reporting and recordkeeping requirements.
