107.1505—Liquidity requirements for Licensees issuing Participating Securities.
If you have outstanding Participating Securities, you must maintain sufficient liquidity to avoid a condition of Liquidity Impairment. Such a condition will constitute noncompliance with the terms of your Leverage under § 107.1820(e).
(a) Definition of Liquidity Impairment.
A condition of Liquidity Impairment exists when your Liquidity Ratio, as determined in paragraph (b) of this section, is less than 1.20. You are responsible for calculating whether you have a condition of Liquidity Impairment:
(b) Computation of Liquidity Ratio.
Your Liquidity Ratio equals your Total Current Funds Available (A) divided by your Total Current Funds Required (B), as determined in the following table:
| Financial account | Amount reportedon SBA form 468 | Weight | Weighted amount |
|---|---|---|---|
| (1) Cash and invested idle funds | ×1.00 | ||
| (2) Commitments from investors | ×1.00 | ||
| (3) Current maturities | ×0.50 | ||
| (4) Other current assets | ×1.00 | ||
| (5) Publicly Traded and Marketable Securities | ×1.00 | ||
| (6) Anticipated operating revenue for next 12 months | (1) | ×1.00 | |
| (7) Total Current Funds Available | A | ||
| (8) Current liabilities | ×1.00 | ||
| (9) Commitments to Small Businesses | ×0.75 | ||
| (10) Anticipated operating expense for next 12 months | (1) | ×1.00 | |
| (11) Anticipated interest expense for next 12 months | (1) | ×1.00 | |
| (12) Contingent liabilities (guarantees) | ×0.25 | ||
| (13) Total Current Funds Required | B | ||
| 1 As determined by Licensee's management under its business plan. | |||