3245-0081 Supporting Statement 03-01-2021

SUPPORTING STATEMENT FOR SBA FORMS 25, 33, and 34

(APPLICANTS FOR SBA-GUARANTEED LEVERAGE)

(OMB Control # 3245 0081)

A. Justification

1. Circumstances necessitating the collection of information. The Small Business Investment Act of 1958, as amended (Act), authorizes the Small Business Administration (SBA) to license Small Business Investment Companies (SBICs) and to regulate their operations [Sec. 301 (c) and Sec. 308 (c)]. The Act authorizes the SBA to provide two types of guaranteed funding to SBICs: (i) debt-type funding through the purchase and sale of debentures; and (ii) equity-type funding through the sale of certain rights in Participating Securities [Sec. 303 (b)]. SBA currently provides funding through the purchase and sale of debentures.

To receive SBA-guaranteed funding, an SBIC must complete the documents and forms required as part of SBA's two-part leverage application process. In the first part, an SBIC must file a commitment application to receive a commitment from SBA to reserve funds for up to five fiscal years. All the forms submitted for approval under this extension submission (SBA Forms 25, 33, and 34) are part of the commitment application and are the only forms in that application package that require OMB’s approval. In the second part, after an SBIC has received a leverage commitment from SBA, an SBIC must file draw application(s) to receive funds under its leverage commitment by drawing a portion (or all) of the outstanding committed debenture funds, as needed. All the forms required in the draw application are either certifications or have been approved by OMB under approval number 3245-0063. Draw applications are accepted for processing by SBA twice a month.

2. How, by whom, and for what purpose information will be used. The forms are required as part of an SBA debenture commitment application to provide SBA with the necessary information to make informed and proper credit decisions. The forms are also needed to establish eligibility for leverage and to demonstrate need for funds by SBICs. Three versions of SBA Form 25 are provided (Form 25 PC, Corporate Resolution, Form 25 PGCP, Corporate General Partner Resolution and Form 25 LLGP, Limited Liability General Partner Resolution). SBA Form 25 is a model form that authorizes the SBIC to enter into funding arrangements. An applicant SBIC only needs to submit one SBA Form 25 per each commitment application using the version of Form 25 that is applicable to its organizational structure. SBA Form 34 provides the account information needed to credit an SBIC's designated account with drawn funds. SBA Form 33, which authorizes the use of leverage draw proceeds to be used to refinance maturing debentures, identifies which maturing debentures are to be refinanced.

3. Technological collection techniques. All SBIC commitment application forms and instructions are available on the SBA’s Office of Investment and Innovation Web Page (https://www.sba.gov/partners/sbics/forms-guides). Some of the forms submitted in the commitment application require original signatures. In addition, all mail currently delivered to SBA by the U.S. Postal Service is irradiated prior to its delivery. The irradiation process causes documents to prematurely age and become damaged and brittle. As a result of the above and to ensure the timely delivery of the entire application package, each commitment application must be express mailed to SBA as part of a single package.

Starting in March 2020, SBA temporarily suspended the requirements for original signatures and hardcopy submissions of commitment applications due to the COVID-19 pandemic. Since then, all SBIC commitment applications have been submitted electronically in PDF format. The acceptance of PDF commitment applications will continue until the COVID-19 emergency is over.

4. Avoidance of Duplication. The type of information requested in the application process is needed to show that a request for funding is properly authorized and to administer the funding process. The information is unique to each transaction and is not reported in any other format. Therefore, the information is not available from any other source, nor is there any duplication of information or documentation.

5. Impact on small business or other small entities. The information requested is obtained only from SBICs who are seeking leverage. There is no significant economic impact on a substantial number of these entities. Only information deemed essential to provide proper legal documentation and allow for both responsible financial review and efficient administration of the funding process is requested of this group of SBICs.

6. Consequences if collection of information is not conducted. The collection of this information is necessary for the effective and efficient administration of the SBIC program. Important credit decisions are based on the information submitted in leverage applications. The completed forms are also necessary to demonstrate legal authority for leverage transactions. Without the information collected through these forms, SBA would not have adequate documentation on which to base credit decisions and, therefore, could not soundly administer this Federal program.

7. Existence of special circumstances. There are no special circumstances that would cause the collection of information from respondents in any manner listed in this item.

8. Solicitation of public comment. The required public comment notice was published in the Federal Register on November 16, 2020, at 85 FR 73124. The comment period expired January 15, 2021. SBA received no comments from the public regarding these forms.

9. Payment or gifts. Respondents are not provided any payment or gift for providing the information required by these application documents.

10. Assurance of confidentiality. The information collected includes financial data relative to an SBIC’s application for guaranteed leverage, which is protected from disclosure under the Freedom of Information Act; specifically, exemptions 4, 6 and 8 allow SBA to withhold financial data on individual companies. The information collected will be protected to the extent permitted by law.

11. Questions of a sensitive nature. Information of a sensitive nature is not requested of respondents.

12. Estimate of the hourly burden of the collection of information. SBA estimates that about 60 SBICs will respond to this information collection annually. SBA Forms 25 and 34 are completed and filed with each commitment application. SBA Form 33 is also filed as part of the commitment application but is only required to be filed when a portion of any approved commitment is to be used to refinance existing debenture leverage. Since the vast majority of commitment applications are intended to provide new financing to small businesses, and not to refinance existing debenture leverage, SBA Form 33 is seldom required.

The estimated burden hour calculation for each form is as follows:

SBA Form Numbers	25	34	33	Total
Est. No. of Responses per respondent	1	1	1
Est. Minutes to Compete Form	20 min	20 min	20 min
Est. Annual Submissions	60	60	2
Estimated Total Hour Burden	20.00	20.00	0.67	41 hrs

The hour and annualized cost calculations are based on completion time estimates provided by previous use of forms by respondents and current wage and mailing costs.

The annualized cost of this collection to respondents is estimated to be $1,160.22. The following calculations are based on the time it takes an executive secretary to complete each form. The cost is based on the median wage estimate for executive secretaries according to the Bureau of Labor Statistics.

SBA Form Numbers	25	34	33	Total
Cost to Complete Forms @ $28.53/Hr.	$9.51	$9.51	$9.51
Total Estimated Cost Per Submission	$9.51	$9.51	$9.51
Estimated Number of Submissions	60	60	2
Est. Annualized Burden Hour Cost	$570.60	$570.60	$19.02	$1,160.22

13. Estimate of total annual cost burden. There are no capital or start-up costs associated with the submission of these forms. The operational cost of express mailing the commitment application to SBA is estimated to be $1,800. The mailing cost is calculated as follows: [60 (Annual Submission Respondents) {times} $30 (Estimated Cost of Express Mail)]. For comparative purposes, the estimated cost of using U.S. Postal Service to mail the same submission would be $180 and calculated as follows:  [60 (Annual Submission Respondents) {times} $3.00 (Estimated Cost of U.S. Postal Service 1^st Class Mail)].

14. Estimated annualized cost to the Federal government. The annualized cost to the Federal government for this collection is estimated to be $1,145.58 based upon review of the data by a GS 13, Step 5 Financial Analyst whose salary is $56.31 per hour according to the 2021 Locality Pay Table for Washington-Baltimore-Arlington. This calculation is made as follows:

SBA Form Numbers	25	34	33	Total
Minutes to Review Submission	10	10	10
Cost of Review & Analysis	$9.39	$9.39	$9.39
Total Est. Cost Per Submission	$9.39	$9.39	$9.39
Total Est. Number of Submissions	60	60	2
Total Est. Annual Cost to Fed. Govt.	$563.40	$563.40	$18.78	$1,145.58

15. Explanation of program changes in Items 13 or 14 on OMB Form 83-I. The number of SBIC commitment applications is 60 per year. This is less than the number reported in the prior submission, which was 70 per year. The change was made to more closely reflect the average number of actual commitment applications received annually over the last five years. As a result, the total annual cost burden decreased to $1,160.22 from $1,119.00 in the prior submission, and the number of annual hours requested decreased to 41 from the current OMB inventory of 47 hours.

16. Collection of information whose results will be published. This information is not intended for publication.

17. Expiration date for collection of information. Not applicable.

18. Exceptions to certifications in Block 19 on OMB Form 83-I. Not applicable.

B. Collection of Information Employing Statistical Methods.

This collection of information does not employ statistical methods.

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