What are the benefits of forming an NMVCC?
• SBA Financial Assistance. SBA will supplement an NMVCC’s own capital through guarantees of debentures to be issued by the company in a face amount of up to 1.5 times its capital. The debentures will have a term of up to 10 years from the date of draw-down and be issued at a discount. Interest for years 1-5 is paid up front in the form of the discount, interest only is payable for years 6-10, and principal is due at the end of year 10. SBA will arrange “just-in-time” funding for the debentures under procedures similar to those utilized in the SBIC program. The debentures are expected to be priced at a current market rate for comparable U.S. Government Treasury securities plus a premium. The debentures are expected to be pre-payable without penalty after one year. There are no SBA fees associated with the debenture (see NMVC Debenture Calculator at http://www.fhlbc.com/sba/newmarketcalculatorpage.htm). Example: An NMVCC with $10 million of contributed capital would be eligible to issue
