Section 15-120-8 - Purpose of loans(a) The department may make community-based enterprise establishment and improvement loans for the start-up costs, purchase, or improvement of a community-based enterprise, and for working capital, and for the purchase, consumption, or improvement of facilities.(b) The department may also make operating loans to carry on or improve an existing community-based enterprise for the purchase of equipment, and for production and marketing expenses including materials, labor, and services.(c) Loans shall not be made where the direct or indirect purpose or result would be to:(1) Pay off a creditor or creditors of the applicant who are inadequately secured and are in a position to sustain a loss;(2) Provide funds, directly or indirectly, for payment, distribution, or as a loan to owners, partners, or shareholders of the applicant's business, except as ordinary compensation for services rendered;(3) Effect a change in ownership of a business, unless the change shall promote the sound development or preserve the existence of the business;(4) Provide or free funds for speculation in any kind of property, real or personal, tangible or intangible;(5) Provide funds to an applicant to engage in the business of lending or investing money;(6) Finance the acquisition, consumption, improvement, or operation of real property which is to be held primarily for sale or investment; provided that this prohibition shall not apply to a loan for the remodeling, maintenance, or improvement (including expansion) of existing commercial or industrial structures already held by the applicant for rental or for use as an essential part of an ongoing business; or(7) Encourage monopoly or be inconsistent with generally accepted practices of the American system of free enterprise.[Eff MAY 15 2020] (Auth: HRS § 210D-8) (Imp: HRS §§ 210D-8 and 210D-9)