On June 2, the U.S. Small Business Administration (SBA) distributed a memorandum from Steve Knott, acting director of the SBA’s Office of SBIC Operations, reminding private funds licensed by the SBA as small business investment companies (SBICs) to submit their annual recertification regarding the status of Institutional Investors.

Annual recertification is required by all SBICs with unfunded commitments from Institutional Investors if the SBIC has outstanding SBA leverage or an outstanding SBA leverage commitment.

Annual recertification regarding the status of Institutional Investors is accomplished by submitting either (1) a letter summarizing the changes to the status of the SBIC’s Institutional Investors and a new Capital Certificate that reflects any revisions in the Licensee's Institutional Investors and/or Regulatory Capital or (2) a letter certifying that a review of the SBIC’s unfunded commitments from Institutional Investors has occurred and no changes are required in the Capital Certificate most recently filed by the SBIC with the SBA.

New Capital Certificates or certification letters are to be submitted to SBIC-WEB by the filing deadlines associated with the ranges provided below. The ranges are based on unfunded commitments from Institutional Investors as reported to the SBA in the SBIC’s Capital Certificate most recently filed with the SBA.

Filing Deadline

Unfunded Commitment Range

 

From:

To:

06/30/16

$20,000,000

Greater than $20,000,000

07/31/16

$12,500,000

$19,999,999

08/31/16

$7,500,000

$12,499,999

09/30/16

$5,000,000

$7,499,999

10/31/16

$2,500,000

$4,999,999

11/30/16

$1

$2,499,999

SBICs that were licensed within the federal government’s current fiscal year (October 1, 2015 through September 30, 2016) are not required to submit a recertification for 2016. In addition, the SBA does not require certification from an SBIC if all of the SBIC’s private capital has been fully funded.

SBICs with any questions regarding the recertification process should contact their SBA financial analyst.

A more detailed description of the SBIC Program is available from Pepper Hamilton LLP at http://www.pepperlaw.com/publications/description-of-the-small-business-investment-company-debenture-program-2016-04-18/