13 C.F.R. § 120.130 Restrictions on uses of proceeds.
Title 13 - Business Credit and Assistance
SBA will not authorize nor may a Borrower use loan proceeds for the following purposes (including the replacement of funds used for any such purpose): (a) Payments, distributions or loans to Associates of the applicant (except for ordinary compensation for services rendered); (b) Refinancing a debt owed to a Small Business Investment Company (“SBIC”); (c) Floor plan financing or other revolving line credit, except under §120.390; (d) Investments in real or personal property acquired and held primarily for sale, lease, or investment (except for a loan to an Eligible Passive Company or to a small contractor under §120.310); (e) A purpose which does not benefit the small business; or (f) Any use restricted by §§120.201 through 120.203 and 120.884 (specific to 7(a) loans and 504 loans respectively).
Title 13: Business Credit and Assistance
PART 120—BUSINESS LOANS
Subpart A—Policies Applying to All Business Loans
Eligibility Requirements
§ 120.130 Restrictions on uses of proceeds.
