StacksVerified U.S. regulatory reference

13 CFR §120.884

Verified against eCFR.gov as of June 20, 2026View official text on eCFR.gov ↗
Costs not directly attributable and necessary for the Project may not be paid with proceeds of the 504 loan. These include, but are not limited to, the following:
  1. (a)Debt refinancing (other than interim financing), except as provided in § 120.882(e) and (g).
  2. (b)A CDC may not use 504 loan proceeds to pay any creditor in a position to sustain a loss causing a shift to SBA of all or part of a potential loss from an existing debt.
  3. (c)Third-Party Loan fees (commitment, broker, finders, origination, processing fees of permanent financing).
  4. (d)Ancillary business expenses, such as:
    1. (1)Working capital;
    2. (2)Counseling or management services fees;
    3. (3)Incorporation/organization costs;
    4. (4)Franchise fees; and
    5. (5)Advertising.
  5. (e)Fixed-asset Project components, such as:
    1. (1)Short-term equipment, furniture, and furnishings (unless essential to and a minor portion of the Project);
    2. (2)Automobiles, trucks, and airplanes; and
    3. (3)Construction equipment (except for heavy duty construction equipment integral to the business' operations with a remaining useful life of a minimum of 10 years).