Mississippi Administrative Code
Title 6 - Economic Development
Part 9 - Economic Development Division
Chapter 4 - Small Business Loan Guarantee Program
Rule 6-9-4.6 - Ineligible Uses of Funding

SBLGP transactions may not have certain features, including any of the following: confessions of judgment, prepayment or "double-dipping" fees, or up front fees or charges paid by the small business, excluding fees to the program, that exceed two percent for loans greater than $25,000 or $500 for loans under $25,000.

Under the program, the borrower may not use the loans for any of the following uses or purposes:

* Refinance existing debt unless the debt is from a non-affiliated lender*

* Used in conjunction with other federal loans or guaranties

* Finance the acquisition, construction, improvement, or operation of real property, which is to be held primarily for sale or investment, such as commercial real estate ownership

* Finance any business engaged in lending, directly or indirectly

* Finance of a nonbusiness purpose

* Repayment of delinquent federal or state income taxes

* Reimburse funds owed to any owner, including any equity injection

* A lender may refinance a borrower's existing loan, line of credit, extension of credit, or other debt originally made by an unaffiliated lender only if the following conditions are met:

* The amount of the refinanced loan or other debt is at least 150 percent of the previous outstanding balance,

* The transaction results in a 30 percent reduction in the fee-adjusted APR contracted for the term of the new debt, and

* Proceeds of the transaction are not used to finance an extraordinary dividend or other distribution.

Miss. Code Ann. § 57-10-601; 12 USC § 5701 et seq.