PART 3TERMS AND CONDITIONS OF ACCREDITATION

Meaning of “relevant investment”I111

1

Subject to paragraph (4), for the purposes of these Regulations a relevant investment is an investment made by the CDFI in an enterprise where—

a

it makes a loan (whether secured or unsecured) to the enterprise, or

b

an issue of securities of or shares in the enterprise, for which the CDFI has subscribed, is made to the CDFI.

2

For the purposes of paragraph (1)(a)—

a

the CDFI does not make a loan to an enterprise where—

i

the enterprise uses overdraft facilities provided by the CDFI, or

ii

the CDFI subscribes for or otherwise acquires securities of the enterprise;

b

where the loan agreement authorises the enterprise to draw down amounts of the loan over a period of time the loan is treated as made at the time when the first amount is drawn down.

3

For the purpose of these Regulations where a relevant investment is a loan within paragraph (2)(b) the amount of the relevant investment is the amount drawn down at a given date.

4

The investments specified in Schedule 1 are not relevant investments.