New Trustee Fee on Regular Debentures and Other SBIC Funding Process Updates

Effective October 1, 2019, the U.S. Small Business Administration (SBA) will begin charging a Trustee Fee on Small Business Investment Company (SBIC) Debentures. The Trustee Fee will equal 0.01% of the face amount of regular Debentures. It will be assessed as a one-time fee withheld from leverage draws in the same manner in which the Draw Fee, Underwriters Fee, and Selling Agent Fee are currently assessed. The Trustee Fee will not be assessed on Early Stage, Low/Moderate Income, or Energy Savings Debentures. 

SBA has also announced that effective August 15, 2019, fax numbers in SBA’s Approval Notices will be replaced with email addresses. Going forward, SBICs submitting executed Approval Notices to SBA’s Trustee, Bank of New York Mellon (BNYM), will need to send such Approval Notices via email. BNYM will send disbursement documentation to SBICs via email going forward as well. 

SBA’s Leverage Commitment Application and Leverage Draw Application instructions have been updated to account for the recently announced SBIC funding process updates.  If you would like copies of the updated instructions or have any questions regarding the Trustee Fee or the new process for submitting executed Approval Notices to and receiving disbursement documentation from BNYM, please contact your SBIC counsel at Winston & Strawn LLP.