Section 15-5-5 - Purpose of loans(a) The department may make loans to applicants to develop new or substantially modified products or inventions. The loans shall be for the purpose of financing acquisition of equipment, machinery, materials, or supplies, or for product development.(b) Loans shall not be granted in any of the following instances: (1) Where the direct or indirect purpose or result of granting the loan would be to: (A) Pay off a creditor or creditors of the applicant who are inadequately secured and are in a position to sustain a loss; or(B) Provide funds, directly or indirectly, for payment, distribution, or as a loan to owners, partners, or shareholders of the applicant's business; or(C) Refund a debt owed to a small business investment company; or(D) Replenish funds heretofore used for any of the purposes stated in this paragraph; or(2) Where the purpose of the applicant in applying for a loan is to effect a change in ownership of a business, unless the change is for a purpose approved by the director; or(3) Where the loan will provide or free funds for speculation in any kind of property, real or personal, tangible or intangible; or(4) Where any part of the gross income of the applicant (or any of its principal owners) is derived from gambling or other illegal activities.[Eff. APR 03 1982; am and comp DEC 21 1989] (Auth: HRS § 211E-2) (Imp: HRS § 211E-2)