{"data":{"id":"us/13-cfr-120.130","jurisdiction":"us","citation":"13 CFR 120.130","heading":"Restrictions on uses of proceeds.","body":"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):\n(a) Payments, distributions, or loans to Associates of the applicant (except for ordinary compensation for services rendered or to facilitate changes of ownership in accordance with § 120.202);\n(b) Refinancing a debt owed to a Small Business Investment Company (“SBIC”) or a New Markets Venture Capital Company (“NMVCC”);\n(c) Floor plan financing or other revolving line of credit, except under § 120.340 or § 120.390;\n(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);\n(e) The applicant may not use any of the proceeds to pay past-due Federal, state, or local payroll taxes, sales taxes, or other similar taxes that are required to be collected by the applicant and held in trust on behalf of a Federal, state, or local government entity.\n(f) A purpose which does not benefit the small business; or\n(g) Any use restricted by §§ 120.201 and 120.884 (specific to 7(a) loans and 504 loans respectively).","path":["Title 13—Business Credit and Assistance","CHAPTER I—SMALL BUSINESS ADMINISTRATION","PART 120—BUSINESS LOANS","Subpart A—Policies Applying to All Business Loans"],"source_url":"https://www.ecfr.gov/api/versioner/v1/full/2026-08-25/title-13.xml","current_through":"2026-08-25","vintage":"","retrieved_at":"2026-08-27T02:24:18Z","sha256":"9a01ec7b18fab1c14674f2363eb5086468809e817908c031ef7ffc708c1a8358","source_id":"us-cfr","stale":true,"prev":"us/13-cfr-120.120","next":"us/13-cfr-120.131"},"notice":"GroundRules: Original legal text. Not legal advice."}