Interest rate ceiling and limitations on fees charged to Small Businesses (“Cost of Money”).

CFR · 2024-01-01 · US · Title 13

“Cost of Money” means the interest and other consideration that you receive from a Small Business. Subject to lower ceilings prescribed by local law, the Cost of Money to the Small Business must not exceed the ceiling determined under this section. (a) (b) (c) (1) Choose a base rate for your Cost of Money computation. The base rate may be either the Debenture Rate currently in effect plus the applicable Charge determined under § 107.1130(d)(1), or your own “Cost of Capital” as determined under paragraph (d) of this section. (2) For a Loan, add 11 percentage points to the base rate; for a Debt Security, add 6 percentage points. In either case, round the sum down to the nearest eighth of one percent. (3) If the result is more than 19 percent (for a Loan) or 14 percent (for a Debt Security), you may use it as your Cost of Money ceiling. (4) If two or more Licensees participate in the same Financing of a Small Business, the base rate used in this (i) The current Debenture Rate plus the applicable Charge determined under § 107.1130(d)(1); (ii) The Cost of Capital of the lead Licensee; or (iii) The weighted average of the Cost of Capital for all Licensees participating in the Financing. (d) (1) For any fiscal year, you may compute your Cost of Capital: (i) As of the first day of your fiscal year, to remain in effect for the entire year; or (ii) As of the first day of every fiscal quarter during the fiscal year, to remain in effect for the duration of the quarter. (2) For each quali

official document · source cfr-2024 · id 13:§ 107.855