# 10 Tex. Admin. Code § 200.106: 10 TAC § 200.106. Eligible and Restricted Uses of Texas Small Business Credit Loan Guarantee Program Loan Proceeds > Texas · Regulations · In force URL: https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_106 ## Section - **Citation:** 10 Tex. Admin. Code § 200.106 - **Heading:** 10 TAC § 200.106. Eligible and Restricted Uses of Texas Small Business Credit Loan Guarantee Program Loan Proceeds - **Jurisdiction:** Texas - **Kind:** Regulations - **Status:** In force - **Text as of:** August 14, 2026 - **Source:** Compiled text - **Location:** Texas Administrative Code / Title 10 COMMUNITY DEVELOPMENT / Part 5 OFFICE OF THE GOVERNOR, ECONOMIC DEVELOPMENT AND TOURISM OFFICE / Chapter 200 TEXAS SMALL BUSINESS CREDIT INITIATIVE / 10 TAC § 200.106 ## Text (a) Borrowers must use loan proceeds for a business purpose. Business purposes include, but are not limited to: (1) start-up costs; (2) working capital; (3) franchise fees; and (4) acquisition of equipment, inventory, or services used in the production, manufacturing, or delivery of a business's goods or services, or in the purchase, construction, renovation, or tenant improvements of an eligible place of business that is not for passive real estate investment purposes. (b) Loan proceeds shall not be used for: (1) acquiring or holding passive investments in real estate; (2) the purchase of owner-occupied residential housing; (3) the construction, improvement, or purchase of residential housing that is owned or to be owned by the Borrower; (4) the purchase of real property that is intended for resale or not used for the business operations of the Borrower; (5) the purchase of securities; (6) lobbying activities; (7) the purchase of good will; (8) inside bank transactions; (9) repayment of delinquent federal or state income taxes unless the Borrower has a payment plan in place with the relevant taxing authority; (10) repayment of taxes held in trust or escrow; (11) reimbursement of funds owed to any owner, including any equity injection or injection of capital for the business' continuance; (12) purchase of any portion of the ownership interest of any owner of the Borrower, such as the acquisition of shares of a company or the partnership interest of a partner when the proceeds of the Enrolled Loan will go to any existing owner or partner of the Borrower; (13) refinance of any portion of a loan enrolled in another credit enhancement or credit insurance program not encompassed by 10 T.A.C. Chapter 200; (14) a loan in which any Principal of a Borrower has been convicted of a sex offense against a minor as such terms are defined 34 U.S.C. 20911; or (15) a loan that is contrary to federal or state law or policy. ## Nearby sections - [10 Tex. Admin. Code § 200.101 10 TAC § 200.101. Texas Small Business Credit Initiative Loan Guarantee Program Authority and Purpose](https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_101.md) - [10 Tex. Admin. Code § 200.102 10 TAC § 200.102. Definitions](https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_102.md) - [10 Tex. Admin. Code § 200.103 10 TAC § 200.103. Program Application Procedure](https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_103.md) - [10 Tex. Admin. Code § 200.104 10 TAC § 200.104. Agreement](https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_104.md) - [10 Tex. Admin. Code § 200.105 10 TAC § 200.105. Qualified Loan Eligibility and Approval](https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_105.md) - [10 Tex. Admin. Code § 200.106 10 TAC § 200.106. Eligible and Restricted Uses of Texas Small Business Credit Loan Guarantee Program Loan Proceeds](https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_106.md) - [10 Tex. Admin. Code § 200.107 10 TAC § 200.107. Loan Guarantee Maximums; Procedure for Enrollment of a Qualified Loan](https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_107.md) - [10 Tex. Admin. Code § 200.108 10 TAC § 200.108. Encumbrance of Funds](https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_108.md) - [10 Tex. Admin. Code § 200.109 10 TAC § 200.109. Procedure for Making a Claim for Reimbursement for Charging Off of an Enrolled Loan](https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_109.md) - [10 Tex. Admin. Code § 200.110 10 TAC § 200.110. Payment of Claims by the Office](https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_110.md) - [10 Tex. Admin. Code § 200.111 10 TAC § 200.111. Recoveries on Loans Subsequent to Payment of Claim](https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_111.md) - [10 Tex. Admin. Code § 200.112 10 TAC § 200.112. Withdrawal from Program; Termination of Participation in Program](https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_112.md) - [10 Tex. Admin. Code § 200.113 10 TAC § 200.113. Excessive Annual Claims Rate by a Participating Financial Institution](https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_113.md) - [10 Tex. Admin. Code § 200.114 10 TAC § 200.114. Inspection of Files](https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_114.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_TX_TAC_T10_P5_C200_S200_106. Check the current official text before relying on it. Not legal advice.