Editorial Note on Part 120
Editorial Note: Nomenclature changes to part 120 appear at 72 FR 50039, Aug. 30, 2007.

§ 120.1700 Definitions used in subpart J. *504 financing.* The loans made to a small business to fund a Project under the SBA's development company loan program authorized by Title V of the Small Business Investment Act of 1958.
*Affiliate.* A person or entity SBA determines to be an affiliate of a Program Participant pursuant to the application of the principles and guidelines set forth in § 121.103 of this Title.
*Central Servicing Agent or CSA.* The entity serving as SBA's central servicing agent for the Program.
*Certified Development Company or CDC.* An entity that meets the definition of a Certified Development Company as defined in § 120.10 of this Part.
*Current.* That no scheduled payment owed by an Obligor pursuant to a Pool Note is over 29 days past due.
*First Lien Position 504 Loan.* The financing provided by the First Lien Position 504 lender that is part of the 504 project financing.
*First Lien Position 504 Loan Pool Guarantee Agreement.* The agreement, in the form approved by SBA, wherein entities agree to participate in the forming of a Pool under the Program, available at *http://www.sba.gov/aboutsba/sbaprograms/elending/index.html/ .*
*Guide.* The First Lien Position 504 Loan Pooling Program Guide published by SBA which provides information applicable to the Program including, among other things, requirements relating to the formation of a Pool, available at *http://www.sba.gov/aboutsba/sbaprograms/elending/index.html/ .*
*Liquidation Proceeds.* Cash, including insurance proceeds, proceeds of any foreclosed-on property disposition, revenues received with respect to the conservation and disposition of a foreclosed-on property or repossessed collateral, including any real property securing the Pool Loan, consisting of a commercial property or residential property and any improvements thereon, and any other amounts received in connection with the liquidation of the Pool Loan, whether through Seller's sale, foreclosure sale, any offset or workout, or otherwise.
*Loan Interest.* The right to receive the owned portion of the principal balance of the Pool Loan together with interest thereon at a per annum rate in effect from time to time in accordance with the First Lien Position 504 Loan Pool Guarantee Agreement.
*Maturity.* The maturity of the Loan Interest in the Pool that has the longest remaining term of any Loan Interest in the Pool. The maturity will change from time to time due to prepayment or default on Loan Interests in the Pool.
*Ongoing Guarantee Fee.* An annual fee collected monthly and based on the percentage of the Pool Loan amount, pursuant to section 503(C)(3)(B)(ii) of the Recovery Act, to result in a cost of the loan guarantee of zero as determined under the Federal Credit Reform Act of 1990, as amended. The funds generated by the fee serve as a reserve to pay for program losses.
*Obligor.* The obligor(s) under a Pool Note.
*Pool.* The aggregate of Loan Interests formed into a single pool by the Pool Originator in accordance with the Program. The Pool is comprised of an unguaranteed portion and an SBA-guaranteed portion. The unguaranteed portion of the Pool backs the Pool Originator Receipt, and cannot be sold to Pool Investors. The SBA-guaranteed portion of the Pool backs the Pool Certificates sold to Pool Investors. The Seller's Loan Interest is not included in the Pool.
*Pool Assembler.* An entity that meets the qualifications of a Pool Assembler as set forth in section 120.630 of this Part and has been approved as such by SBA.
*Pool Certificate.* The document representing a beneficial fractional interest in the SBA-guaranteed portion of a Pool.
*Pooled.* When one or more Loan Interests in a Pool Loan has been put into a Pool.
*Pooling.* The transfer of one or more Loan Interests in a Pool Loan into a Pool.
*Pool Investor.* An entity which holds a Pool Certificate in accordance with Program Rules and Regulations.
*Pool Loan.* A loan that meets the Program eligibility requirements as set forth in § 120.1704 of this subpart J and has been pooled.
*Pool Loan Receivables.* Pool Loan payments, prepayments, or collections made in connection with the Pool Loan by the Obligor pursuant to Pool Note or any other Pool Loan documents or agreements, or by another person or entity made on behalf of any such Pool Loan obligor, and Liquidation Proceeds.
*Pool Note.* The document evidencing a Pool Loan.
*Pool Originator.* An entity approved by SBA to pool Loan Interests under the Program.
*Pool Originator Receipt.* The document evidencing the Pool Originator's retained ownership in a Pool it has formed under the Program.
*Premier Certified Lenders Program.* The program defined in § 120.845 of this Part.
*Program.* The program authorized by section 503 of the American Recovery and Reinvestment Act of 2009.
*Program Participant.* An entity that executes the First Lien Position 504 Loan Pool Guarantee Agreement as Seller, Pool Originator, or Pool Investor, and any successors or assignees thereof.
*Program Participant Associate.* ( 1 ) An officer, director, key employee, or holder of 20 percent or more of the value of a Program Participant's stock or debt instruments, or
( 2 ) Any individual in which one or more individuals referred to in paragraph (1) of this definition, or a spouse, or child, or sibling, or the spouse of any such individual, owns or controls at least 20 percent.
*Program Preference.* Any arrangement giving the Seller, Pool Originator, or a Program Associate or Affiliate of Seller or Pool Originator, a preference or benefit of proportion greater than its Loan Interest as compared to Pool Originator, Pool Investor, or SBA relating to the making, servicing, or liquidation of the Loan with respect to such things as repayment, collateral, guarantees, control, maintenance of a compensating balance, purchase of a certificate of deposit or acceptance of a separate or companion loan, without SBA's consent. Seller's agreement to grant a Pool Loan's Obligor a deferment in return for receiving more collateral on a different loan owned by Seller is an example of a preference.
*Program Rules and Regulations.* This subpart J, as may be amended from time to time by SBA (the Program Regulations), the First Lien Position 504 Loan Pool Guarantee Agreement, any other Program agreements signed by a Program Participant, if applicable, the Guide, the Recovery Act, and the provisions of subpart H governing Third Party Loans and Third Party Lenders.
*Project.* A project as defined by § 120.802 of the Part.
*SBA.* The United States Small Business Administration, an agency of the United States Government.
*Seller.* An entity that has sold a Pool Loan to a Pool Originator to be Pooled and any successor entity that has executed the First Lien Position 504 Loan Pool Guaranty Agreement pursuant to § 120.1707.
*Seller's Pool Loan.* The Pool Loan sold to a Pool Originator pursuant to the First Lien Position 504 Loan Pool Guarantee Agreement.
*Seller Receipt.* The document that evidences a Seller's Loan Interest.
*Servicing Retention Amount.* The amount of a Pool Loan interest payment retained by Seller for servicing the Pool Loan that is payable and calculated pursuant to the First Lien Position 504 Loan Pool Guarantee Agreement.
*Weighted Average Interest Rate.* The dollar-weighted average interest rate of a Pool Certificate calculated by multiplying the interest rate of each Loan Interest in the Pool by the ratio of that Loan Interest's current outstanding principal in the SBA-guaranteed portion of the Pool (that is, the portion of the Pool Loan backing the Pool Certificates) to the current aggregate or outstanding principal of each Loan Interest in the SBA-guaranteed portion of the Pool, and adding the sum of the resulting products. The Pool Certificate interest rate will fluctuate over the life of the Pool as defaults, prepayments and normal repayments applicable to Loan Interests in the Pool occur.
*Weighted Average Maturity.* The weighted average maturity of a Pool Certificate is a dollar weighted average maturity that is calculated by multiplying the remaining term, in months, of each Loan Interest in a Pool by the ratio of that Loan Interest's current outstanding pooled principal to the current aggregate outstanding pooled principal of all Loan Interests in the Pool, and adding the sum of the resulting products. The weighted average maturity of a Pool Certificate will fluctuate over the life of the Pool as Loan Interest defaults, prepayments and normal Loan Interest repayments occur.