[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR120.131]

[Page 169]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
                CHAPTER I--SMALL BUSINESS ADMINISTRATION
 
PART 120--BUSINESS LOANS--Table of Contents
 
           Subpart A--Policies Applying to All Business Loans
 
Sec. 120.131  Leasing part of new construction or existing building to another business.

    (a) If the SBA business loan involves the construction of a new 
building, a Borrower may lease up to 33 percent of the Rentable Property 
for a short term to any third party if reasonable growth projections 
show that the Borrower will need additional space within three years and 
will use all of the additional space within ten years. If the Borrower 
is an Eligible Passive Company leasing 100 percent of the Project space 
to one or more Operating Company, the Operating Company, or Operating 
Companies together, may sublease up to 33 percent of the Rentable 
Property to a third party under the same conditions. (See 
Sec. 120.870(c) for an exception with respect to 504 Projects.)
    (b) If the SBA business loan involves the acquisition, renovation, 
or reconstruction of an existing building, the Borrower may lease up to 
49 percent of the Rentable Property long term. If the Borrower is an 
Eligible Passive Company leasing 100 percent of the Project space to one 
or more Operating Companies, the Operating Company, or Operating 
Companies together may sublease up to 49 percent of its Rentable 
Property to a third party under the same conditions. (For 504 loans, see 
Sec. 120.871).

[64 FR 2117, Jan. 13, 1999; 64 FR 27445, May 20, 1999]

                          Ethical Requirements