Improper Use of CAP Loans

Improper Use of CAP Loans. Capital Access Contract Loans are not available under the following circumstances: A. To pay off existing debt for consolidation purposes; B. If the direct or indirect purpose or result would be to pay off creditors of applicants who are inadequately secured or in a position to sustain a loss; C. If the assistance would, directly or indirectly, provide or replenish funds for payment, distribution, or a loan to owner, partners, or stockholders of the Small Business and would not change the ownership interest of the business (does not apply to ordinary compensation for services rendered in the course of business); D. If the loan funds would provide funds for speculation in a any kind of property; or if the assistance would finance the acquisition, construction, improvement, or operation of real property which is to be held primarily for sale or investment; E. If the loan is for construction or purchase of residential housing. Each loan made under the Capital Access Contract Loan Program must be approved by the Mississippi Development Authority.