15 U.S.C. § 686

Aggregate limitations on amount of assistance to any single enterprise

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(a) Percentage limitation on private capitalIf any small business investment company has obtained financing from the Administrator and such financing remains outstanding, the aggregate amount of securities acquired and for which commitments may be issued by such company under the provisions of this subchapter for any single enterprise shall not, without the approval of the Administrator, exceed 10 percent of the sum of—(1) the private capital of such company; and(2) the total amount of leverage projected by the company in the company’s business plan that was approved by the Administrator at the time of the grant of the company’s license.(b) Repealed. Pub. L. 92–595, § 2(f), Oct. 27, 1972, 86 Stat. 1316(c) Application of provisions to commitments incurred prior to effective date of section

With respect to obligations or securities acquired prior to the effective date of the Small Business Investment Act Amendments of 1967, and with respect to legally binding commitments issued prior to such date, the provisions of this section as in effect immediately prior to such effective date shall continue to apply.

(Pub. L. 85–699, title III, § 306, Aug. 21, 1958, 72 Stat. 694; Pub. L. 87–341, § 7(a), Oct. 3, 1961, 75 Stat. 753; Pub. L. 88–273, § 4, Feb. 28, 1964, 78 Stat. 146; Pub. L. 90–104, title II, § 207, Oct. 11, 1967, 81 Stat. 271; Pub. L. 92–595, § 2(f), Oct. 27, 1972, 86 Stat. 1316; Pub. L. 102–366, title IV, § 408(a), Sept. 4, 1992, 106 Stat. 1016; Pub. L. 111–5, div. A, title V, § 505(b), Feb. 17, 2009, 123 Stat. 156.)Editorial NotesReferences in Text

For effective date of the Small Business Investment Act Amendments of 1967, referred to in subsec. (c), see Effective Date of 1967 Amendment note set out under section 681 of this title.

Amendments

2009—Subsec. (a). Pub. L. 111–5 amended subsec. (a) generally. Prior to amendment, text read as follows: “If any small business investment company has obtained financing from the Administration and such financing remains outstanding, the aggregate amount of obligations and securities acquired and for which commitments may be issued by such company under the provisions of this subchapter for any single enterprise shall not exceed 20 per centum of the private capital of such company, without the approval of the Administration.”

1992—Subsec. (a). Pub. L. 102–366 amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “Without the approval of the Administration, the aggregate amount of obligations and securities acquired and for which commitments may be issued by any small business investment company under the provisions of this chapter for any single enterprise shall not exceed 20 percent of the combined private paid-in capital and paid-in surplus of such company.”

1972—Subsec. (a). Pub. L. 92–595, § 2(f)(1), substituted “combined private paid-in capital” for “combined paid-in capital”.

Subsec. (b). Pub. L. 92–595, § 2(f)(2), repealed subsec. (b) which enumerated the items making up the combined paid-in capital and paid-in surplus of companies licensed prior to January 1, 1968.

1967—Subsec. (a). Pub. L. 90–104 substituted “paid-in capital and paid-in surplus of such company” for “capital and surplus of such small business investment company authorized by this chapter”.

Subsecs. (b), (c). Pub. L. 90–104 added subsecs. (b) and (c).

1964—Pub. L. 88–273 struck out the $500,000 limitation on amount of assistance to any single enterprise.

1961—Pub. L. 87–341 inserted “or (2) $500,000, whichever is the lesser”.

Statutory Notes and Related SubsidiariesEffective Date of 1967 Amendment

Amendment by Pub. L. 90–104 effective Jan. 1, 1968, see section 211 of Pub. L. 90–104, set out as a note under section 681 of this title.

Effective Date of 1961 Amendment

Pub. L. 87–341, § 7(b), Oct. 3, 1961, 75 Stat. 753, provided that: “The amendment made by subsection (a) [amending this section] shall apply only with respect to obligations and securities acquired by a small business investment company on or after the date of the enactment of this Act [Oct. 3, 1961]; except that such amendment shall not apply with respect to any obligations or securities so acquired pursuant to a commitment issued before such date.”

Effect 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 6 cases, 1968–1996 · 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. § 686 (a); 13 C.F.R. § 107.303 .”

United States v. Coleman Capital Corp., 295 F. Supp. 1016 (N.D. Ill. 1969). · cites it 2× “15 U.S.C. § 686 . 3 The plaintiff *1019 contends that the defendant’s combined paid-in capital and paid-in surplus was $721,950 during the relevant period, 4 so that $144,390 was the maximum amount the defendant could loan to any single enterprise without S.”

Frillz, Inc. v. Lader, 925 F. Supp. 83 (D. Mass. 1996). · cites it 2× “At oral argument, the court denied both parties’ motions for summary judgment, except that it reserved judgment on the matter (raised by the defendant) that is the subject of this order: the effect of 15 U.S.C. § 686 (a)(6) on the contract at issue in this case.”

Small Bus. Admin. v. Segal, 383 F. Supp. 198 (D. Conn. 1974). · cites it 4× “Plaintiff contends that these loans to two corporations which were controlled by one individual should be aggregated in considering whether defendants violated old 15 U.S.C. § 686 and 15 C.F.R. § 107.708 which prohibit the lending of amounts in excess of twenty percent of the…”

Elec. Sys. Inv. Corp. v. Small Bus. Admin., 405 F.2d 188 (4th Cir. 1968). “687a(e), the Administration issued an order on September 21, 1966 requiring Electronic Systems Investment Corporation, chartered in Maryland, to show cause why its license as a small business investment company under the Act should not be suspended for, and the corporation…”

United States v. Boca Raton Capital Corp., 285 F. Supp. 504 (S.D. Fla. 1968). “Section 306 of the Small Business Investment Act, 15 U.S.C. § 686 (a), and Section 107.708(a) of the SBA Regulations (Rev.”

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