15 U.S.C. § 697f
Subject to the requirements set forth in subsection (b), an issuer of a debenture purchased by the Federal Financing Bank and guaranteed by the Administration under this chapter may, at the election of the borrower (in the case of a loan under section 697 of this title) or the issuer (in the case of a small business investment company) and with the approval of the Administration, prepay such debenture in accordance with the provisions of this section.
In making a prepayment under paragraph (1)-
For purposes of subparagraph (A)(i), the repurchase premium is the amount equal to the product of-
For purposes of clause (i)(II), the applicable percentage rate means-
The percentage rates described in clause (ii) shall be increased or decreased by the Administration by a factor not to exceed one-third, if the same factor is applied in each case and if the Administration determines that an adjustment is necessary, based on the number of borrowers having given notice of their intent to participate, in order to make the program (including the amounts appropriated for this purpose under Public Law 103-317) result in no substantial net gain or loss of revenue to the Federal Financing Bank or to the Administration. Amounts collected in excess of the amount necessary to ensure revenue neutrality shall be refunded to the borrowers.
For purposes of subsection (a), the requirements of this subsection are that-
No fees or penalties other than those specified in this section may be imposed on the issuer, the borrower, the Administration, or any fund or account administered by the Administration as the result of a prepayment under this section.
The refinancing of a debenture under sections 697a and 697b of this title, in accordance with subsection (b)(2)-
An applicant for refinancing under section 697a of this title of a loan made pursuant to section 697 of this title shall not be required to demonstrate that a requisite number of jobs will be created with the proceeds of a refinancing.
To cover the cost of loan packaging, processing, and other administrative functions, a development company that provides refinancing under subsection (b)(2) may impose a one-time loan processing fee, not to exceed 0.5 percent of the principal amount of the loan.
Issuers of debentures under subchapter III may issue new debentures in accordance with such subchapter in order to prepay existing debentures as authorized in this section.
The Administration shall use certified mail and other reasonable means to notify each eligible borrower of the prepayment program provided in this subchapter. Each preliminary notice shall specify the range and dollar amount of repurchase premiums which could be required of that borrower in order to participate in the program. In carrying out this program, the Administration shall provide a period of not less than 45 days following the receipt of such notice by the borrower during which the borrower must notify the Administration of the borrower's intent to participate in the program. The Administration shall require that a borrower who gives notice of its intent to participate to make an earnest money deposit of $1,000 which shall not be refundable but which shall be credited toward the final repurchase premium.
For purposes of this paragraph, the term "borrower", in the case of a small business investment company or a specialized small business investment company, means "issuer".
Based upon the response to the preliminary notice under paragraph (5), the Administration shall make a final computation of the necessary prepayment premiums and shall notify each qualified respondent of the results of such computation. Each qualified respondent shall be afforded not less than 4 months to complete the prepayment.
For purposes of this section-
Not later than 30 days after October 22, 1994, the Administration shall promulgate such regulations as may be necessary to carry out this section.
There are authorized to be appropriated $30,000,000 to carry out the provisions of The Small Business Prepayment Penalty Relief Act of 1994.
15 U.S.C. § 697f
EDITORIAL NOTES
REFERENCES IN TEXTFor definition of "this chapter", referred to in subsec. (a)(1), see References in Text note set out under section 661 of this title. Public Law 103-317 referred to in subsec. (a)(2)(B)(iii), is Pub. L. 103-317, 108 Stat. 1724, known as the Departments of Commerce, Justice, and State, The Judiciary, and Related Agencies Appropriations Act, 1995. For complete classification of this Act to the Code, see Tables.The Small Business Prepayment Penalty Relief Act of 1994, referred to in subsec. (g), is title V of Pub. L. 103-403, 108 Stat. 4198, which enacted this section and provisions set out as notes under this section and section 661 of this title. For complete classification of this Act to the Code, see Short Title of 1994 Amendment note set out under section 661 of this title and Tables.
AMENDMENTS1996-Subsec. (a)(1). Pub. L. 104-208, §208(h)(1)(H)(i), struck out at end "A small business investment company operating under the authority of section 681(d) of this title that has issued a debenture that was purchased by and is held by the Administration, may, under the same terms and conditions, prepay such debenture, and the penalty as provided in this section, and shall thereafter be immediately eligible to apply for additional assistance from the Administration."Subsec. (e)(1)(B). Pub. L. 104-208, §208(h)(1)(H)(ii), substituted "section 681 of this title" for "subsection (c) or (d) of section 681 of this title".
STATUTORY NOTES AND RELATED SUBSIDIARIES
INTENTION OF CONGRESS Pub. L. 103-403, title V, §502, Oct. 22, 1994, 108 Stat. 4198, provided that: "(a) IN GENERAL.-The Small Business Administration shall fully utilize the $30,000,000 appropriated in Public Law 103-317 [108 Stat. 1724] to reduce, in accordance with this title [enacting this section and provisions set out as a note under section 661 of this title] and the amendments made by this title, prepayment penalties imposed in connection with debentures issued under-"(1) section 303 or 503 of the Small Business Investment Act of 1958 [15 U.S.C. 683, 697], which have been purchased by the Federal Financing Bank; and"(2) title III [probably means title III of Pub. L. 85-699 which is classified to section 681 et seq. of this title] to companies operating under section 301(d) of such Act [15 U.S.C. 681(d)], which have been purchased by the Small Business Administration."(b) EQUAL OPPORTUNITY.-In order to provide an equal opportunity to participate in the program authorized under this title, the Small Business Administration shall afford each borrower or issuer of a debenture subject to this title, not less than 45 days to elect to participate and to provide an earnest money deposit. The Administration shall subsequently allow a period of not less than 4 months, during which those borrowers or issuers that elect to participate shall be allowed to complete the prepayment process."(c) RESTRICTIONS ON PARTICIPATION.-In no event shall the Small Business Administration-"(1) allow any borrower or issuer to participate in the program if the borrower or issuer fails to- "(A) make a timely election and provide the deposit on a timely basis; or"(B) complete the prepayment process within the required time; or"(2) allow any borrower or issuer to participate in the program at a percentage rate other than the rate finally determined to be applicable to all other borrowers or issuers with similar terms of years."
- State
- the term "State" includes the several States, the territories and possessions of the United States, the Commonwealth of Puerto Rico, and the District of Columbia;
- Administration
- the terms "Administration" and "Administrator" mean the Small Business Administration and the Administrator thereof, respectively; and