Title 13

SECTION 120.352

120.352 Use of proceeds.

§ 120.352 Use of proceeds.

Loan proceeds may be used for two purposes.

(a) Qualified employer securities. A qualified employee trust may relend loan proceeds to the employer by purchasing qualified employer securities. The small business concern may use these funds for any general purpose under section 7(a) of the Act.

(b) Control of employer. A qualified employee trust may use loan proceeds to purchase a controlling interest (51 percent) in the employer. Ownership and control must vest in the trust by the time the loan is repaid.

[85 FR 80588, Dec. 14, 2020]