[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR123.201]

[Page 331-332]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
                CHAPTER I--SMALL BUSINESS ADMINISTRATION
 
PART 123--DISASTER LOAN PROGRAM--Table of Contents
 
               Subpart C--Physical Disaster Business Loans
 
Sec. 123.201  When am I not eligible to apply for a physical disaster business loan?

    (a) You are not eligible for a physical disaster business loan if 
your business is an agricultural enterprise or if you (or any principal 
of the business) fit into any of the categories in Sec. 123.101. 
Agricultural enterprise means a business primarily engaged in the 
production of food and fiber, ranching and raising of livestock, 
aquaculture and all other farming and agriculture-related industries.
    (b) Sometimes a damaged business entity (whether in the form of a 
corporation, limited liability company, partnership, or sole 
proprietorship) is engaged in both agricultural enterprise and a non-
agricultural business venture. If the agricultural enterprise part of 
your business entity has suffered a physical disaster, that enterprise 
is not eligible for SBA physical disaster assistance. If the non-
agricultural business venture of your entity has suffered physical 
disaster damage, that part of your business operation would be eligible 
for SBA physical disaster assistance. If both the agricultural 
enterprise part and the non-agricultural business venture have incurred 
physical disaster damage, only the non-agricultural business venture of 
your business entity would be eligible for SBA physical disaster 
assistance.
    (c) If your business is going to relocate voluntarily outside the 
business area in which the disaster occurred, you are not eligible for a 
physical disaster business loan. If, however, the relocation is due to 
uncontrollable or compelling circumstances, SBA will consider the 
relocation to be involuntary and eligible for a loan. Such circumstances 
may include, but are not limited to:
    (1) The elimination or substantial decrease in the market for your 
products or services, as a consequence of the disaster;
    (2) A change in the demographics of your business area within 18 
months prior to the disaster, or as a result of the disaster, which 
makes it uneconomical to continue operations in your business area;
    (3) A substantial change in your cost of doing business, as a result 
of the disaster, which makes the continuation of your business in the 
business area not economically viable;
    (4) Location of your business in a hazardous area such as a special 
flood hazard area or an earthquake-prone area;

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    (5) A change in the public infrastructure in your business area 
which occurred within 18 months or as a result of the disaster that 
would result in substantially increased expenses for your business in 
the business area;
    (6) Your implementation of decisions adopted and at least partially 
implemented within 18 months prior to the disaster to move your business 
out of the business area; and
    (7) Other factors which undermine the economic viability of your 
business area.
    (d) You are not eligible if your business is engaged in any illegal 
activity.
    (e) You are not eligible if you are a government owned entity 
(except for a business owned or controlled by a Native American tribe).
    (f) You are not eligible if your business presents live performances 
of a prurient sexual nature or derives directly or indirectly more than 
de minimis gross revenue through the sale of products or services, or 
the presentation of any depictions or displays, of a prurient sexual 
nature.

[61 FR 3304, Jan. 31, 1996, as amended at 62 FR 35337, July 1, 1997; 63 
FR 46644, Sept. 2, 1998]