15 U.S.C. § 685

Long-term loans to small-business concerns

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(a) Authorization

Each company is authorized to make loans, in the manner and subject to the conditions described in this section, to incorporated and unincorporated small-business concerns in order to provide such concerns with funds needed for sound financing, growth, modernization, and expansion.

(b) Direct loans; loans on participation basis

Loans made under this section may be made directly or in cooperation with other lenders, incorporated or unincorporated, through agreements to participate on an immediate or deferred basis.

The maximum rate of interest for the company’s share of any loan made under this section shall be determined by the Administration: Provided, That the Administration also shall permit those companies which have issued debentures pursuant to this chapter to charge a maximum rate of interest based upon the coupon rate of interest on the outstanding debentures, determined on an annual basis, plus such other expenses of the company as may be approved by the Administration.

(d) Maturity

Any loan made under this section shall have a maturity not exceeding twenty years.

(e) Soundness of loan; security

Any loan made under this section shall be of such sound value, or so secured, as reasonably to assure repayment.

(f) Extension or renewal

Any company which has made a loan to a small-business concern under this section is authorized to extend the maturity of or renew such loan for additional periods, not exceeding ten years, if the company finds that such extension or renewal will aid in the orderly liquidation of such loan.

(Pub. L. 85–699, title III, § 305, Aug. 21, 1958, 72 Stat. 693; Pub. L. 87–341, § 6, Oct. 3, 1961, 75 Stat. 753; Pub. L. 94–305, title I, § 105, June 4, 1976, 90 Stat. 666; Pub. L. 102–366, title IV, § 411, Sept. 4, 1992, 106 Stat. 1018.)Editorial NotesReferences in Text

For definition of “this chapter”, referred to in subsec. (c), see References in Text note set out under section 661 of this title.

Amendments

1992—Subsec. (c). Pub. L. 102–366 inserted before period at end “: Provided, That the Administration also shall permit those companies which have issued debentures pursuant to this chapter to charge a maximum rate of interest based upon the coupon rate of interest on the outstanding debentures, determined on an annual basis, plus such other expenses of the company as may be approved by the Administration”.

1976—Subsec. (b). Pub. L. 94–305 struck out provision that in agreements to participate in loans on a deferred basis, the participation by the company shall not be in excess of 90 percentum of the balance of the loan outstanding at the time of disbursement.

1961—Subsec. (b). Pub. L. 87–341 substituted “other lenders, incorporated or unincorporated” for “other lending institutions”.

Statutory Notes and Related SubsidiariesEffect of Small Business Equity Enhancement Act of 1992 on Securities Laws

Nothing in amendment by Pub. L. 102–366 to be construed to affect applicability of securities laws or to otherwise supersede or limit jurisdiction of Securities and Exchange Commission, see section 418 of Pub. L. 102–366, set out as a note under section 661 of this title.

Notes of Decisions

Cited in 3 cases, 1968–1991 · leading case: United States v. Fid. Capital Corp., a Georgia Corp., Commonwealth Mortg. Corp. of Am., Intervenor-Appellee, 920 F.2d 827 (11th Cir. 1991).

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United States v. Fid. Capital Corp., a Georgia Corp., Commonwealth Mortg. Corp. of Am., Intervenor-Appellee, 920 F.2d 827 (11th Cir. 1991). “” 15 U.S.C. § 685 (e). 11 Any control an SBIC (or its officers, directors, and related companies) acquires over a small business in which it invests must be temporary, subject to a written agreement to relinquish control within seven years.”

United States v. Coleman Capital Corp., 295 F. Supp. 1016 (N.D. Ill. 1969). · cites it 2× “15 U.S.C. § 685 (a). The Polaris financing clearly violated the Act, and the defendant’s assertion that the loan was repaid long before this action was brought is irrelevant, as indicated above.”

Ana Small Bus. Investments, Inc. v. Small Bus. Admin. of the United States of Am., 391 F.2d 739 (9th Cir. 1968). “693 (1958), as amended, 15 U.S.C. § 685 (1964). 2 The Act is part of a declared congressional policy to stimulate and supplement the flow of private equity and long-term loan funds to small business concerns (§ 102 of Act, 72 Stat.”

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