6 Miss. Code. R. 9-5.7
Under the program, loans used for these purposes are not eligible for SSBCI funds:
* Improve or renovate any portion of rentable property that the small business borrower leases to a third party;
* Acquiring or holding passive investments in real estate; Passive real estate investment includes most real estate development (including construction) in which the developer does not intend to occupy or actively use the resulting real property. A small business borrower can deliver the assurance that the loan is not being used for passive real estate if the small business borrower occupies and uses at least a specific percentage of the building; the percentage varies depending on whether the project involves the construction of a new building or renovation of an existing building;
* Purchase of securities;
* Lobbying activities (as defined in Section 3(7) of the Lobbying Disclosure Act of 1995, P.L. 104-65, as amended);
* Repay delinquent federal or jurisdiction income taxes unless the borrower has a payment plan in place with the relevant taxing authority;
* Repay taxes held in trust or escrow (e.g., payroll or sales taxes);
* Reimburse funds owed to any owner, including any equity investment or investment of capital for the business's continuance;
* Purchase any portion of the ownership interest of any owner of the business, except for the purchase of an interest in an employee stock ownership plan qualifying under section 401 of Internal Revenue Code. This prohibition applies to the acquisition of shares of a company or the partnership interest of a partner when the proceeds of the loan directly supported by SSBCI funds will go to any existing owner or partner;
* Refinance existing debt unless the debt is from a non-affiliated lender.
* A lender may refinance a borrower's existing loan, line of credit, extension of credit, or other debt originally made by an unaffiliated lender only if the following conditions are met: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.
* Financial institution lenders are generally prohibited from refinancing an existing outstanding balance or previously made loan, line of credit, extension of credit, or other debt owed by a small business borrower already on the books of the same financial institution (or an affiliate). However, a financial institution lender may use SSBCI funds to support a new extension of credit that repays the amount due on a matured loan or other debt that was previously used for an eligible business purpose when all the following conditions are met:
* The amount of the new loan or other debt is at least 150 percent of the outstanding amount of the matured loan or other debt;
* The new credit supported with SSBCI funding is based on a new underwriting of the small business's ability to repay the loan and a new approval by the lender;
* The prior loan or other debt has been paid as agreed and the borrower was not in default of any financial covenants under the loan or debt for at least the previous 36 months (or since origination, if shorter); and
* Proceeds of the transaction are not used to finance an extraordinary dividend or other distribution.
6 Miss. Code. R. 9-5.7