Section 108.900 - Fees for management services provided to a Small Business by a NMVC Company or its Associate(a)General. This section applies to management services that you or your Associate provide to a Small Business during the term of a Financing or prior to a Financing. It does not apply to management services that your Associate provides to a Small Business that you do not finance. It also does not apply to Operational Assistance that you or your Associate provide to a Smaller Enterprise that you have Financed or in which you expect to make a Financing, for which neither you nor your Associate may charge the Smaller Enterprise.(b)SBA approval. You must obtain SBA's prior written approval of any management services fees and other fees described in this section that you or your Associate charge.(c)Permitted management services fees. You or your Associate may provide management services to a Small Business financed by you if: (1) You or your Associate have entered into a written contract with the Small Business;(2) The fees charged are for services actually performed;(3) Services are provided on an hourly fee, project fee, or other reasonable basis;(4) You can demonstrate to SBA, upon request, that the rate does not exceed the prevailing rate charged for comparable services by other organizations in the geographic area of the Small Business; and(5) At least 50 percent of any management services fees paid to your Associate by a Small Business for management services provided by the Associate is allocated back to you for your benefit.(d)Fees for service as a board member. You or your Associate may charge a Small Business Financed by you for services provided as members of the Small Business' board of directors. The fees must not exceed those paid to other outside board members. In the absence of such board members, fees must be reasonable when compared with amounts paid to outside directors of similar companies. Fees may be in the form of cash, warrants, or other payments. At least 50 percent of any such fees paid to your Associate by a Small Business for service by the Associate as a board member must be allocated back to you for your benefit.(e)Transaction fees.(1) You or your Associate may charge reasonable transaction fees for work performed such as preparing a Small Business for a public offering, private offering, or sale of all or part of the business, and for assisting with the transaction. Fees may be in the form of cash, notes, stock, and/or options. At least 50 percent of any such fees paid to your Associate by a Small Business for transactions work done by the Associate must be allocated back to you for your benefit.(2) Your Associate may charge market rate investment banking fees to a Small Business on that portion of a Financing that you do not provide.(f)Recordkeeping requirements. You must keep a record of hours spent and amounts charged to the Small Business, including expenses charged. 67 FR 68503 , Nov. 12, 2002