13 C.F.R. § 107.800
Financings in the form of Equity Securities
(a) You may purchase the Equity Securities of a Small Business. You may not, inadvertently or otherwise:
(1) Become a general partner in any unincorporated business; or
(2) Become jointly or severally liable for any obligations of an unincorporated business.
(b) Definition. Equity Securities means stock of any class in a corporation, stock options, warrants, limited partnership interests in a limited partnership, membership interests in a limited liability company, or joint venture interests. If the Financing agreement contains debt-type acceleration provisions or includes redemption provisions, other than those permitted under § 107.850, the security will be considered a Debt Security for purposes of § 107.855 and § 107.1150(c)(1).
Notes of Decisions
Cited in 1
case, 2015–2015 · leading case: Medallion Fin. Corp. v. Weingarten, 132 A.D.3d 596 (N.Y. App. Div. 2015).
Medallion Fin. Corp. v. Weingarten, 132 A.D.3d 596 (N.Y. App. Div. 2015). “” The court correctly found that the participation interest does not render the loans usurious under the SBIA, because it is not “interest” within the meaning of the Act but either a contingent obligation, which is excluded from the definition of “interest” {see 15 USC § 687 [i]…”
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