13 CFR 120.884 - Ineligible costs for 504 loans.

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§ 120.884 Ineligible costs for 504 loans.
Costs not directly attributable and necessary for the Project may not be paid with proceeds of the 504 loan. These include, but are not limited to, the following:
(a) Debt refinancing (other than interim financing), except as provided in § 120.882(e) and (g).
(b) A CDC may not use 504 loan proceeds to pay any creditor in a position to sustain a loss causing a shift to SBA of all or part of a potential loss from an existing debt.
(c) Third-Party Loan fees (commitment, broker, finders, origination, processing fees of permanent financing).
(d) Ancillary business expenses, such as:
(1) Working capital;
(2) Counseling or management services fees;
(3) Incorporation/organization costs;
(4) Franchise fees; and
(5) Advertising.
(e) Fixed-asset Project components, such as:
(1) Short-term equipment, furniture, and furnishings (unless essential to and a minor portion of the Project);
(2) Automobiles, trucks, and airplanes; and
(3) Construction equipment (except for heavy duty construction equipment integral to a business' operations and meeting the IRS definition of capital equipment).
[61 FR 3235, Jan. 31, 1996, as amended at 64 FR 2118, Jan. 13, 1999; 74 FR 29591, June 23, 2009; 76 FR 9219, Feb. 17, 2011]

Title 13 published on 2014-01-01

The following are only the Rules published in the Federal Register after the published date of Title 13.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2014-03-21; vol. 79 # 55 - Friday, March 21, 2014
    1. 79 FR 15641 - 504 and 7(a) Loan Programs Updates
      GPO FDSys XML | Text
      SMALL BUSINESS ADMINISTRATION
      Final rule.
      This rule is effective April 21, 2014, except for the amendment to 13 CFR 120.823, which is effective April 21, 2015.
      13 CFR Part 120

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United States Code
Statutes at Large

Title 13 published on 2014-01-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 13 CFR 120 after this date.

  • 2014-03-21; vol. 79 # 55 - Friday, March 21, 2014
    1. 79 FR 15641 - 504 and 7(a) Loan Programs Updates
      GPO FDSys XML | Text
      SMALL BUSINESS ADMINISTRATION
      Final rule.
      This rule is effective April 21, 2014, except for the amendment to 13 CFR 120.823, which is effective April 21, 2015.
      13 CFR Part 120