[Code of Federal Regulations]

[Title 13, Volume 1]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 13CFR123.201]



[Page 350-351]

 

                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



[[Page 351]]



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;

    (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]