The following types of businesses are ineligible:

Non-profit businesses (for-profit subsidiaries are eligible);

Financial businesses primarily engaged in the business of lending, such as banks, finance companies, and factors (pawn shops, although engaged in lending, may qualify in some circumstances);

Passive businesses owned by developers and landlords that do not actively use or occupy the assets acquired or improved with the loan proceeds (except Eligible Passive Companies under § 120.111);

Life insurance companies;

Businesses located in a foreign country (businesses in the U.S. owned by aliens may qualify);

Pyramid sale distribution plans;

Businesses deriving more than one-third of gross annual revenue from legal gambling activities;

Businesses engaged in any illegal activity;

Private clubs and businesses which limit the number of memberships for reasons other than capacity;

Government-owned entities (except for businesses owned or controlled by a Native American tribe);

Businesses principally engaged in teaching, instructing, counseling or indoctrinating religion or religious beliefs, whether in a religious or secular setting;

[Reserved]

Loan packagers earning more than one third of their gross annual revenue from packaging SBA loans;

Businesses with an Associate who is incarcerated, on probation, on parole, or has been indicted for a felony or a crime of moral turpitude;

Businesses in which the Lender or CDC, or any of its Associates owns an equity interest;

Businesses which:

Present live performances of a prurient sexual nature; or

Derive directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature;

Unless waived by SBA for good cause, businesses that have previously defaulted on a Federal loan or Federally assisted financing, resulting in the Federal government or any of its agencies or Departments sustaining a loss in any of its programs, and businesses owned or controlled by an applicant or any of its Associates which previously owned, operated, or controlled a business which defaulted on a Federal loan (or guaranteed a loan which was defaulted) and caused the Federal government or any of its agencies or Departments to sustain a loss in any of its programs. For purposes of this section, a compromise agreement shall also be considered a loss;

Businesses primarily engaged in political or lobbying activities; and

Speculative businesses (such as oil wildcatting).