What You Need to Know

by Beth Manzi, Chief Operating Officer, PEF Services LLC

Beth Manzi at PEF ServicesOn October 20, 2017, SBA sent a letter detailing their exam priorities and a new notice requirement.

Click here to read the SBIC Program Examination Priorities letter to SBIC Licensees

For your convenience, we have summarized the important matters below:

Due to limited resources, exam cycles have extended beyond the SBA’s target of 12 to 14 months between exams. Therefore, SBA has extended their view of a Recent Exam to cover a period that ends within the past 18 months. We anticipate that SBA will revert back to the 12 to 14 month standard as quickly as possible.

In addition, SBA has added a Request for Advance Notice requirement. If you are planning to submit a leverage commitment or subsequent license application, you should notify your SBA Analyst at least 4 months prior to the planned submission date so that SBA can assess if an exam needs to be scheduled to avoid delay.

For Existing SBICs

If you are planning to submit a new leverage commitment or subsequent license application and your last SBA Exam was not completed for a reporting period in the last 18 months, contact your SBA analyst to request an exam.

For First Time SBICs

Prior to the successful completion of your first SBA Exam, you cannot draw down leverage in excess of 50% of Regulatory Capital.

If you expect to exceed that amount of leverage in the upcoming year and have not already been scheduled for an exam, you should contact your SBA analyst to request an SBA Exam.

If you have any questions, please contact your PEF Client Services representative.