Georgia requires that each lender obtain an assurance from each
borrower stating that the loan proceeds will not be used for an impermissible
purpose under the SSBCI Program.
Lenders are prohibited from refinancing any existing
outstanding balance or previously made loan, line of credit, extension of
credit or other debt owed by a small business borrower already on the books of
the same lender (or an affiliate) into a SSBCI-supported program.
Each lender must obtain an assurance from the borrower
The loan proceeds must
be used for a "business purpose." A business purpose includes, but is not
limited to, start-up costs, working capital, business procurement, franchise
fees, equipment, inventory, as well as the purchase, construction, renovation
or tenant improvements of an eligible place of business that is not for passive
real estate investment purposes. The definition of business purpose excludes
activities that relate to acquiring or holding passive investments such as
commercial real estate ownership, the purchase of securities; and lobbying
activities as defined in Section 3 (7) of the Lobbying Disclosure Act of 1995,
, as amended.
The loan proceeds will not be used to:
a. repay delinquent federal or state income
taxes unless the borrower has a payment plan in place with the relevant taxing
b. repay taxes held
in trust or escrow, e.g. payroll or sales taxes; or
c. reimburse funds owed to any owner,
including any equity injection or injection of capital for the business'
d. purchase any
portion of the ownership interest of any owner of the business.
The borrower is not:
a. an executive officer, director, or
principal shareholder of the financial institution lender; or
b. a member of the immediate family of an
executive officer, director, or principal shareholder of the financial
institution lenders; or
related interest of such an executive officer, director, principal shareholder,
or member of the immediate family.
For the purposes of these three borrower
restrictions, the terms "executive officer","director","principal
shareholder","immediate family", and "related interest" refer to the same
relationship to a lender as the relationship described in part 215
of title 12
of the Code of Federal Regulations, or any successor to such part.
The borrower is not:
1. a business engaged in speculative
activities that develop profits from fluctuations in price rather than through
normal course of trade, such as wildcatting for oil and dealing in commodities
futures, unless those activities are incidental to the regular activities of
the business and part of a legitimate risk management strategy to guard against
price fluctuations related to the regular activities of the business;
2. a business that earns more
than half of its annual net revenue from lending activities; unless the
business is a non-bank or non-bank holding company certified as a Community
Development Financial Institution; or
3. a business engaged in pyramid sales, where
a participant's primary incentive is based on the sales made by an
ever-increasing number of participants; or
4. a business engaged in activities that are
prohibited by federal or state law or applicable law in the jurisdiction where
the business is located or conducted. (Included in these activities is the
production, servicing, or distribution of otherwise legal products that are to
be used in connection with an illegal activity, such as selling drug
paraphernalia or operating a motel that knowingly permits illegal
5. a business
engaged in gambling enterprises, unless the business earns less than 33% of its
annual net revenue from state lottery sales.
No principal of the borrowing entity has
been convicted of a sex offense against a minor (as such terms are defined in
section 111 of the Sex Offender Registration and Notification Act (
). For the purposes of this
certification,"principal" is defined as "if a sole proprietorship, the
proprietor; if a partnership, each managing partner and each partner who is a
natural person and holds a 20% or more ownership interest in the partnership;
and if a corporation, limited liability company, association or a development
company, each director, each of the five most highly compensated executives or
officers of the entity, and each natural person who is a direct or indirect
holder of 20% or more of the ownership stock or stock equivalent of the
Ga. Comp. R. & Regs.
"Eligible Applicants and Activities" adopted. F. Feb.
9, 2012; eff. Feb. 29, 2012.
Amended: F. Jul. 29,
2013; eff. Aug. 18, 2013.
Amended: F. June 21,
2017; eff. June 1, 2017, as specified by the