CFR > Title 13 - Business Credit and Assistance > CHAPTER I—SMALL BUSINESS ADMINISTRATION > PART 107—SMALL BUSINESS INVESTMENT COMPANIES > SUBPART G—Financing of Small Businesses by Licensees (§107.700 to §107.900) > 107.820—Financings in the form of guarantees.

107.820—Financings in the form of guarantees.

At the request of a Small Business or where necessary to protect your existing investment, you may guarantee the monetary obligation of a Small Business to any non-Associate creditor.
(a) You may not issue a guaranty if:
(1) You would become subject to State regulation as an insurance, guaranty or surety business;
(2) The amount of the guaranty plus any direct Financings to the Small Business exceed the overline limitations of § 107.740, except that a pledge of the Equity Securities of the issuer or a subordination of your lien or creditor position does not count toward your overline; or
(3) The total financing cost to the Small Business exceeds the cost of money limits of § 107.855.
(b) Pledge of Licensee's assets as guaranty. For purposes of this section, a guaranty with recourse only to specific asset(s) you have pledged is equal to the fair market value of such asset(s) or the amount of the debt guaranteed, whichever is less.