(a)The business of a licensee shall be the business of providing financing assistance and management assistance to business firms. A licensee shall not engage in a business other than the business of providing financing assistance and management assistance to business firms.
(b)The powers of a licensee include, but are not limited to, all of the following:
(1)To borrow money and otherwise incur indebtedness for purposes authorized herein, including issuance of corporate bonds, debentures, notes, or other evidence of indebtedness;
(2)(A) A licensee may determine the form and the terms and conditions for financing assistance provided by that licensee to a business firm including, but not limited to:
(ii)Purchase of debt instruments;
(iii)Straight equity investm
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(a) The business of a licensee shall be the business of providing financing assistance and management assistance to business firms. A licensee shall not engage in a business other than the business of providing financing assistance and management assistance to business firms. (b) The powers of a licensee include, but are not limited to, all of the following: (1) To borrow money and otherwise incur indebtedness for purposes authorized herein, including issuance of corporate bonds, debentures, notes, or other evidence of indebtedness; (2) (A) A licensee may determine the form and the terms and conditions for financing assistance provided by that licensee to a business firm including, but not limited to: (i) Forms such as loans; (ii) Purchase of debt instruments; (iii) Straight equity investments such as purchase of common stock or preferred stock; (iv) Debt with equity features such as warrants to purchase stock, convertible debentures, or receipt of a percent of net income or sales; (v) Royalty based financing; (vi) guaranteeing of debt; or (vii) Leasing of property; (B) A licensee may purchase securities of a business firm either directly or indirectly through an underwriter; and (C) A licensee may participate in any government program for which the licensee is eligible and that has as one (1) of its functions the provision or facilitation of financing assistance or management assistance to business firms; (3) Management assistance provided by a licensee to a business firm may encompass both management or technical advice and management or technical services; (4) Financing assistance or management assistance provided by a licensee to a business firm shall be for the business purposes of that business firm; (5) A licensee may exercise the incidental powers that are necessary or convenient to carry on the business of, or are reasonably related to the business of, providing financing assistance and management assistance to business firms; (6) (A) In connection with an extension of credit by a licensee, a licensee may charge or receive interest at any rate that does not exceed the maximum rate that may be charged or received by any other lender in Tennessee, that is chartered or licensed by the state of Tennessee or any agency or instrumentality of the state of Tennessee, or charged or received by a small business investment company licensed by the small business administration, subject only to those terms and conditions stipulated in this part; (B) As used in subdivision (b)(6)(A), "interest" does not include anything of value that is contingent on performance or value of the borrower, including, but not limited to, a percentage of net income of the borrower, royalties, stock in the borrower, warrants to purchase stock in the borrower and convertibility of debentures; and (7) In connection with funding its operations, a licensee may sell small business loans, other securities and related collateral to special purpose corporations, including subsidiaries of the licensee, grantor or other trusts or similar entities that purchase the loans and resell or pledge the loans to third parties in connection with securitizations and similar transactions, and the entities may collect principal, interest, and fees with respect to loans originated by a licensee without being required to be licensed under this part. (c) (1) A licensee shall transact its business in a prudent business manner and shall maintain itself in a viable condition. (2) In determining whether a licensee is transacting business in a prudent business manner, the commissioner shall not consider the risk of the financing assistance provided by the licensee to a business firm, unless the commissioner determines that the risk is so great compared with the realistically expected return as to demonstrate mismanagement of the licensee. (3) Subsection (a) shall not limit the authority of the commissioner to do any of the following: (A) Determine that a licensee's financing assistance to a single business firm or a group of affiliated business firms is in violation of this subsection (c) if the amount of financing assistance is unduly large in relation to the total assets or the total shareholders' equity of the licensee; (B) Require that a licensee maintain a reserve in the amount of anticipated losses unless the loans have been marked to market value pursuant to applicable accounting standards; or (C) Require that a licensee have in effect a written financing assistance policy, approved by its board of directors, including credit evaluation criteria and other matters. The commissioner shall not require that a licensee adopt a financing assistance policy that contains standards that prevent the licensee from exercising needed flexibility in evaluating and structuring financing assistance to business firms on a deal-by-deal basis.