13 C.F.R. Subpart D—Application and Approval Process for NMVC Company Designation
Title 13 - Business Credit and Assistance
(a) Notice of Funds Availability (“NOFA”). SBA will publish a NOFA in the (b) Application form. An Applicant must apply for designation as a NMVC Company 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. Each Applicant must submit a complete application, including the following: (a) Amounts. The Applicant must indicate— (1) The specific amount of Regulatory Capital it proposes to raise (which amount must be at least $5,000,000); and (2) The specific amount of binding commitments for contributions in cash or in-kind it proposes to raise, and/or an annuity it proposes to purchase, in accordance with the requirements of §108.2030, as its matching resources for its Operational Assistance grant award (the aggregate of which must be not less than $1,500,000 or 30 percent of the Regulatory Capital it proposes to raise under paragraph (a)(1) of this section, whichever is greater). (b) Comprehensive business plan. The Applicant must submit a comprehensive business plan covering at least a five-year period, addressing the specific items described in §108.320, and which demonstrates that the Applicant has the capacity to operate successfully as a NMVC Company. (c) New Markets Tax Credit program. Applicant must address if and to what extent it intends to conform its activities to the New Markets Tax Credit laws. If Applicant plans to seek a New Markets Tax Credit, Applicant also must state the amount of tax credit allocation it intends to seek. [66 FR 28609, May 23, 2001, as amended at 67 FR 68502, Nov. 12, 2002] (a) Executive summary. The executive summary must include a description of— (1) The Applicant; (2) Its strategy for how it proposes to make successful Developmental Venture Capital investments in identified LI Areas; (3) The markets in the LI Areas it proposes to serve; and (4) How it intends to work with community organizations in and be accountable to the residents of identified LI Areas in order to facilitate its Developmental Venture Capital investments. (b) Capacity, skills, and experience of the management team. An Applicant must provide information generally as to the background, capability, education, reputation and training of its general partners, managers, officers, key personnel, investment committee and governing board members. The Applicant also must provide information specifically on these individuals' qualifications and reputation in the areas of Community Development Finance and/or Relevant Venture Capital Finance, including the impact of these individuals' activities in these areas. (c) Market analysis. An Applicant must provide an analysis of the LI Areas in which it intends to focus its Developmental Venture Capital investments and Operational Assistance to Smaller Enterprises, demonstrating that the Applicant understands the market and the unmet capital needs in such areas and how its activities will meet these unmet capital needs through Developmental Venture Capital investments and will 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. An Applicant also must analyze the extent of the demand in such areas for Developmental Venture Capital investments and any factors or trends that may affect the Applicant's ability to make effective Developmental Venture Capital investments. (d) Operational capacity and investment strategies. An Applicant must submit information concerning its policies and procedures for underwriting and approving its Developmental Venture Capital investments, monitoring its portfolio, and maintaining internal controls and operations. (e) Regulatory Capital. An Applicant must include a detailed description of how it plans to raise its Regulatory Capital. An Applicant 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 Applicant. (f) Plan for providing Operational Assistance. An Applicant must describe how it plans to use its grant funds to provide Operational Assistance to Smaller Enterprises in which it will make Developmental Venture Capital 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. (g) Matching resources for Operational Assistance grant. An Applicant must include a detailed description of how it plans to obtain binding commitments for cash or in-kind contributions, and/or to purchase an annuity, to match the funds requested from SBA for the Applicant'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). Applicant must discuss its potential sources of matching resources, the estimated timing on raising such funds, and the extent of the expressions of interest to commit such funds to the Applicant. Potential sources of matching resources must satisfy the requirements in §108.2030(b)(1). (h) Projected amount of investment in LI Areas. An Applicant must describe the amount of its total Regulatory Capital and Leverage that it proposes to invest in Smaller Enterprises located in LI Areas, as compared to the amount that it proposes to invest in Small Businesses located outside of LI Areas. (i) Projected impact. An Applicant 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) A description of the extent to which it will concentrate its Developmental Venture Capital investments and Operational Assistance activities in identified LI Areas; (2) 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; (3) A description of the criteria to be used to measure the benefits created as a result of its activities; (4) A discussion about the amount of such benefits created that it will consider to constitute successfully meeting the objectives of the NMVC program. (j) Affiliates and business relationships. Applicant must submit information regarding the management and financial strength of any parent or holding entity, affiliated firm or entity, or any other firm or entity essential to the success of the Applicant's business plan. [66 FR 28609, May 23, 2001, as amended at 67 FR 68503, Nov. 12, 2002] An Applicant must pay to SBA a grant issuance fee of $5,000. An Applicant must submit this fee in advance, at the time of application submission. If SBA does not select an Applicant as a Conditionally Approved NMVC Company or designate an Applicant as a NMVC Company, SBA will refund this fee to the Applicant.
Title 13: Business Credit and Assistance
PART 108—NEW MARKETS VENTURE CAPITAL (“NMVC”) PROGRAM
Subpart D—Application and Approval Process for NMVC Company Designation
§ 108.300 When and how to apply for designation as a NMVC Company.
§ 108.310 Contents of application.
§ 108.320 Contents of comprehensive business plan.
§ 108.330 Grant issuance fee.
