How a Licensee computes Earmarked Profit (Loss).

CFR · 2024-01-01 · US · Title 13

Computing your Earmarked Profit (Loss) is the first step in determining your obligations to pay Prioritized Payments, Adjustments and Charges under § 107.1520 and Profit Participation under § 107.1530. (a) (1) Each full fiscal year. (2) Any interim period (consisting of one or more fiscal quarters) for which you want to make a Distribution. (b) (1) An Earmarked Asset remains earmarked until you dispose of it, even if you no longer have any outstanding Participating Securities. (2) Investments you make after redeeming all your Participating Securities are not Earmarked Assets. However, if you issue new Participating Securities, all of your Loans and Investments again become Earmarked Assets. (3) If you were licensed before March 31, 1993, you may be permitted to exclude Loans and Investments held at that date from Earmarked Assets under § 107.1590. (c) (d) (ii) For the purpose of determining Net Income (Loss), leverage fees paid to SBA and partnership syndication costs that you incur must be capitalized and amortized on a straight-line basis over not less than five years. (2) “Excess Management Expenses” are those that exceed the following limit: (i) For a full fiscal year, the limit is the lower of: (A) 2.5 percent of your weighted average Combined Capital for the year, plus $125,000 if Combined Capital is below $20,000,000; or (B) Your Management Expenses approved by SBA. (ii) For less than a full fiscal year, you must prorate the annual amounts in paragraph (d)(2)(i) of thi

official document · source cfr-2024 · id 13:§ 107.1510