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SBA RIN: 3245-AG48 Publication ID: 2012 
Title: ●7(a) Loan Program - Eligible Passive Companies (Completed Action)  
Abstract: Prior SBA loan regulations allowed lenders and Certified Development Companies to make a loan to an Eligible Passive Company ("EPC") to purchase real or fixed assets that it leases to an Operating Company ("OC"). The prior regulations also allowed the loan to include working capital, as long as the EPC and OC are co-borrowers. SBA discovered that some of its lenders had interpreted this rule to allow EPCs and OCs to co-borrow funds for the purchase of other assets for the OC's use, including intangible assets (such as trademarks, copyrights, intellectual property, or goodwill). SBA recognized the need for this type of financing and needed to amend its regulations at 13 CFR 120.111 and 120.120 to allow it to continue. 
Agency: Small Business Administration(SBA)  Priority: Other Significant 
RIN Status: First time published in the Unified Agenda Agenda Stage of Rulemaking: Completed Actions 
Major: No  Unfunded Mandates: No 
CFR Citation: 13 CFR 120   
Legal Authority: 16 USC 634(b)(6)    16 USC 634(b)(7)    16 USC 634(b)(14)    16 USC 634(h)   
Legal Deadline:  None
Timetable:
Action Date FR Cite
Direct Final Rule  04/02/2012  77 FR 19531   
Comment Period End  05/02/2012 
Direct Final Rule Effective  05/17/2012  77 FR 19531   
Regulatory Flexibility Analysis Required: No  Government Levels Affected: None 
Small Entities Affected: Businesses  Federalism: No 
Included in the Regulatory Plan: No 
RIN Data Printed in the FR: No 
Agency Contact:
Grady Hedgespeth
Director, Office of Financial Assistance
Small Business Administration
409 Third Street SW.,
Washington, DC 20416
Phone:202 205-7562
Fax:202 481-0248
Email: grady.hedgespeth@sba.gov