CFR > Title 13 - Business Credit and Assistance > CHAPTER I—SMALL BUSINESS ADMINISTRATION > PART 120—BUSINESS LOANS > SUBPART A—Policies Applying to All Business Loans (§120.100 to §120.197) > 120.130—Restrictions on uses of proceeds.

120.130—Restrictions on uses of proceeds.

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).