Under terms of the U. S. Economic Development Agency Grant Agreement and the Regional Development Corporation (RDC) Loan Administration Plan, both as amended, loans cannot be made for the following ineligible purposes:

1. Relocation: Loans cannot be made to a business that is relocating jobs from outside the local commuting area. Commuting area is that area defined by the distance people travel to work in the locality of the borrower.
2. Eligible area: By definition, Erie County. The economic benefits and activity of an RDC loan must be at funding and for the life of the loan within the eligible area. Exceptions can be considered on a case-by-case basis when (1) the borrower is located within an immediately contiguous county and (2) it can be demonstrated that a substantial portion of the economic benefits of the project will flow to residents of Erie County and (3) the contiguous county makes available a matching loan on similar terms and conditions.
3. Non-substitution: Generally, no borrower is eligible who can obtain the requested loan from another lender on reasonable terms and conditions, which would permit completion and/or successful operation or accomplishment of the project being financed by the RDC. Regardless, the RDC loan may be used as an incentive, through favorable loan terms, to attract a new business or a business expansion into an eligible area designated in the RDC annual loan policy.
4. Public and quasi-public borrowers are not generally eligible unless (1) the activity financed directly benefits (or will benefit) identifiable business concerns and (2) there is reasonable assurance that the activity financed will result in increased business activity in the near term.
5. Private developers are not generally eligible unless the activity financed is non-speculative, consistent with the strategic and lending objectives of the RDC, and directly benefits, or will directly benefit, identifiable business concerns.
6. Loans cannot be made to the RDC or a related organization.
7. Loans cannot be made to acquire an equity position in a private business.
8. Loans cannot be made to subsidize interest payments on an existing loan.
9. Loans cannot be made to provide the equity contribution required of borrowers under other Federal loan programs.
10. Loans cannot be made to enable the borrower to acquire an interest in a business, either through the purchase of stock or through the acquisition of assets, unless the need for RDC financing is sufficiently justified, and documented in the loan write-up. Acceptable justification could include acquiring a business to substantially save it from imminent foreclosure or acquiring it to expand it with increased investment. The resulting economic benefit should be demonstrably consistent with the strategic objectives of the RDC.
11. Loans cannot be made to refinance existing debt unless:
    • There is sound economic justification and the loan write-up sufficiently documents that the RDC loan is not replacing private capital solely for the purpose of reducing the risk of loss to an existing lender(s) or to lower the cost of financing to a borrower, OR
    • An RDC loan uses RDC income sources and/or recycled RDC funds to purchase the rights of a prior lienholder during an in-process foreclosure action to preclude a significant loss on an RDC loan. This action may be taken only if there is a high probability of receiving compensation within a reasonable time period (18 months) from the sale of assets which compensation would be sufficient to cover the RDC's expenses plus a reasonable portion of the outstanding loan obligation.
    • In either refinance exception, the Economic Development Agency recommends that the RDC seek clarification or written comment from the Economic Development Agency if there is any question regarding use of an exception in a specific case.

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