[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR120.131]

[Page 225]
 
                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 financing (whether 7(a) or 504) is for the 
construction of a new building, a Borrower may permanently lease up to 
20 percent of the Rentable Property to one or more tenants if the 
Borrower permanently occupies and uses no less than 60 percent of the 
Rentable Property, and plans to permanently occupy and use within three 
years some of the remaining space not immediately occupied and not 
permanently leased and plans to permanently occupy and use within ten 
years all of the remaining space not permanently leased. If the Borrower 
is an Eligible Passive Company which leases 100 percent of the new 
building's space to one or more Operating Companies, the Operating 
Company, or Operating Companies together, must follow the same rules set 
forth in this paragraph.
    (b) If the SBA financing (whether 7(a) or 504) is for the 
acquisition, renovation, or reconstruction of an existing building, the 
Borrower may permanently lease up to 49 percent of the Rentable Property 
if the Borrower permanently occupies and uses no less than 51 percent of 
the Rentable Property. If the Borrower is an Eligible Passive Company 
which leases 100 percent of the space of the existing building to one or 
more Operating Companies, the Operating Company, or Operating Companies 
together, must follow the same rules set forth in this paragraph.

[68 FR 51679, Aug. 28, 2003]

                          Ethical Requirements