What is an LMI Enterprise? A Comprehensive Legal Overview

Definition & Meaning

An LMI Enterprise, or Low-to-Moderate Income Enterprise, is a type of small business that meets specific criteria regarding its workforce or assets in designated low-to-moderate income zones. To qualify as an LMI Enterprise, a business must either:

Have at least 50% of its employees or tangible assets located in LMI Zones, or
Have at least 35% of its full-time employees residing in LMI Zones.

This determination is made at the time of application for financing through Small Business Investment Companies (SBIC). If a small business does not meet these criteria initially, it can still qualify if it certifies its intention to meet the requirements within 180 days after receiving SBIC financing.

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Legal Use & context

The term LMI Enterprise is primarily used in the context of small business financing and economic development. It is significant in legal practices related to business financing, economic assistance, and community development. The designation helps businesses access funding and support aimed at fostering growth in economically challenged areas. Users can manage their applications and related documents through resources like US Legal Forms, which provide templates for necessary legal documents.

Key legal elements

Real-world examples

Here are a couple of examples of abatement:

Example 1: A small manufacturing company located in an LMI Zone employs 60 workers, with 40 of them living in the same area. This company qualifies as an LMI Enterprise due to both criteria being met.

Example 2: A tech startup does not initially meet the criteria but certifies that it will relocate its operations and hire locally within 180 days after receiving SBIC financing. If it fulfills this commitment, it will then qualify as an LMI Enterprise.

Relevant laws & statutes

The definition of LMI Enterprise is outlined in the Code of Federal Regulations, specifically in 13 CFR 107.50. This regulation governs the financing of small businesses through SBICs and establishes the criteria for LMI designation.

Comparison with related terms

Term	Definition	Key Differences
LMI Enterprise	A small business meeting specific criteria related to LMI Zones.	Focuses on employee and asset location or residency.
Small Business	A business that is independently owned and operated.	Does not specifically relate to income zones.
SBIC Financing	Funding provided by Small Business Investment Companies.	Involves specific eligibility criteria, including LMI designation.

Common misunderstandings

What to do if this term applies to you

If you believe your business qualifies as an LMI Enterprise, start by assessing your employee distribution and asset locations. Gather necessary documentation to support your application for SBIC financing. You can find helpful templates and forms on US Legal Forms to assist in this process. If your situation is complex, consider consulting a legal professional for tailored advice.

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Quick facts

Attribute	Details
Eligibility Criteria	50% of employees/assets in LMI Zones or 35% of employees residing in LMI Zones.
Compliance Period	180 days to meet requirements post-financing.
Legal Reference	13 CFR 107.50.