The United States Small Business Administration (SBA) released its annual recertification notice on May 15, 2014. Small Business Investment Company (SBIC) Funds with unfunded commitments from Institutional Investors must complete the annual recertification if the SBIC Fund has outstanding SBA leverage, an SBA leverage commitment or both. This requirement is part of the SBA’s continuing efforts to ensure that Institutional Investors remain qualified investors and that Regulatory Capital is accurately reported.
SBIC Funds must submit either:
- A new Capital Certificate that has been updated for all changes in the SBIC Fund’s Institutional Investors or Regulatory Capital, or
- A letter certifying that a review of the SBIC Fund’s unfunded commitments from Institutional Investors revealed that no changes were required in the most recently filed Capital Certificate.
SBIC Funds must submit the appropriate Capital Certificate or letter to their SBA operations analysts by the applicable filing deadline.
Filing Deadlines
| Filing Deadline | Unfunded Commitment Range | |
| From | To | |
| June 30, 2014 | $20,000,000 | >$20,000,000 |
| July 31, 2014 | $12,500,000 | $19,999,999 |
| August 31, 2014 | $7,500,000 | $12,499,999 |
| September 30, 2014 | $5,000,000 | $7,499,999 |
| October 31, 2014 | $2,500,000 | $4,999,999 |
| November 30, 2014 | $1 | $2,499,999 |
Additionally, for SBIC Funds with Parent Drop-Down structures, the SBA has introduced special instructions that require all leveraged SBIC Funds with unfunded parent commitments and which were licensed before October 2010, to respond to the 2014 Unfunded Commitment Questionnaire.
SBIC Funds licensed between October 1, 2013, and September 30, 2014, are not required to complete the recertification process. If you have any questions regarding these issues, or would like assistance during the recertification process, please feel free to contact Mark A. Kromkowski (312.849.8170), your primary attorney at McGuireWoods, or any of the authors.