[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: 13CFR123.404]



[Page 355]

 

                TITLE 13--BUSINESS CREDIT AND ASSISTANCE

 

                CHAPTER I--SMALL BUSINESS ADMINISTRATION

 

PART 123_DISASTER LOAN PROGRAM--Table of Contents

 

                 Subpart E_Pre-Disaster Mitigation Loans

 

Sec. 123.404  When is your business ineligible to apply for a 

pre-disaster mitigation loan?



    Your business is ineligible to apply for a pre-disaster mitigation 

loan if your business (including its affiliates) satisfies any of the 

following conditions:

    (a) Any of your business' principal owners is presently 

incarcerated, or on probation or parole following conviction of a 

serious criminal offense, or has been indicted for a felony or a crime 

of moral turpitude;

    (b) Your business' only interest in the business property is in the 

form of a security interest, mortgage, or deed of trust;

    (c) The building, which is the subject of the mitigation measure, 

was newly constructed or substantially improved on or after February 9, 

1989, and (without significant business justification) is located 

seaward of mean high tide or entirely in or over water;

    (d) Your business is an agricultural enterprise. Agricultural 

enterprise means a business primarily engaged (see Sec. 121.107 of this 

chapter) in the production of food and fiber, ranching and raising of 

livestock, aquaculture and all other farming and agriculture-related 

industries. Sometimes a business is engaged in both agricultural and 

non-agricultural business activities. If the primary business activity 

of your business is not an agricultural enterprise, it may apply for a 

pre-disaster mitigation loan, but loan proceeds may not be used, 

directly or indirectly, for the benefit of the agricultural activities;

    (e) Your business is engaged in any illegal activity;

    (f) Your business is a government owned entity (except for a 

business owned or controlled by a Native American tribe);

    (g) 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;

    (h) Your business engages in lending, multi-level sales 

distribution, speculation, or investment (except for real estate 

investment with property held for commercial rental);

    (i) Your business is a non-profit or charitable concern;

    (j) Your business is a consumer or marketing cooperative;

    (k) Your business derives more than one-third of its gross annual 

revenue from legal gambling activities;

    (l) Your business is a loan packager that earns more than one-third 

of its gross annual revenue from packaging SBA loans;

    (m) Your business principally engages in teaching, instructing, 

counseling, or indoctrinating religion or religious beliefs, whether in 

a religious or secular setting; or

    (n) Your business is primarily engaged in political or lobbying 

activities.