(a) Without SBA's prior written approval, you may provide Financing or a Commitment to a Small Business only if the resulting amount of your aggregate outstanding Financings and Commitments to such Small Business and its Affiliates does not exceed 10 percent of the sum of:
- (1) Your Regulatory Capital as of the date of the Financing or Commitment; plus
- (2) The total amount of leverage projected in your participation agreement with SBA; plus
- (3) Any permitted Distribution(s) you made during the five years preceding the date of the Financing or Commitment which reduced your Regulatory Capital.
- (b) For the purposes of paragraph (a) of this section, you must measure each outstanding Financing at its current cost plus any amount of the Financing that was previously written off.
[66 FR 28609, May 23, 2001, as amended at 76 FR 63545, Oct. 12, 2011]