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# Manage an SBIC

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## Content

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## Portfolio financing and reporting requirements

### Quarterly and annual financial report

SBIC Licensees must submit Quarterly financial reports with respect to fund-level financials and portfolio company financings (Forms 468 and 1031). Form 468 is due within 45 days after the close of each quarter, commensurate with portfolio valuation due dates as finalized under §§ 107.503 and 107.650. Quarterly Form 468 is a “short” version of the Annual Form 468 to reduce the reporting burden while enabling transparency into program investment performance and improved monitoring. Annual Form 468 is due within 90 days of the close of the fiscal year end.

### Portfolio financing report

For each financing of a small business, excluding guarantees, SBIC Licensees must submit a portfolio financing report within 30 days of the close of the quarter in which portfolio company financings occurred. 

## Accounting and valuation standards

Appendix 14 provides guidance to SBICs on accounting policies and procedures, financial reporting to SBA, and selection of an auditor. It also contains guidelines for independent public accountants engaged to conduct annual audits of SBICs.

Appendix 15 describes the policies and procedures which SBICs must follow in valuing their loans and investments. It also provides the techniques and standards which are generally applicable to such valuations.

Appendix 16 provides for two-digit number designations for major categories under which accounts are listed, and three-digit number designations for individual general ledger accounts.

Non-leveraged licensees may submit GAAP-compliant valuations.

### Standard Debenture (semi-annual interest)

Standard Debentures are loans issued to SBIC Licensees at face value requiring semi-annual payment of interest on outstanding leverage. SBA guarantees all principal and unpaid interest. This type of debenture is designed to align with the cash flows of debt-oriented investment strategies and strategies with a recurring current pay component.

### Accrual Debenture

Accrual Debentures are loans issued to SBIC Licensees at face value that accrue interest over a ten-year term, where SBA guarantees all principal and unpaid accrued interest. This type of debenture is designed to align with the cash flows of long-duration, equity-oriented investment strategies.

## SBA Leverage Commitments

An SBIC may request Leverage Commitments against SBA’s Total Intended Leverage Commitment by obtaining SBA's conditional commitment to guarantee debentures. Instructions are available in the commitment application instructions.

## SBA Leverage Draws

An SBIC may draw down (call) against SBA's Leverage Commitment to guarantee debenture. Follow the draw application instructions.

## Interest rates and other fees

## Regulatory examinations

The SBA Office of Investment and Innovation Examinations Division performs periodic remote and on-site examinations of SBICs every one to two years to monitor regulatory compliance with SBIC program statutory, regulatory and policy requirements. Examiners also ensure the accuracy of information SBICs submit to SBA.

The regulations governing examinations of SBICs, including fees, are set forth in 13 CFR 107.690-692.

 

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