Business Purpose Statement

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Question:

What is the explanation of a business purpose statement? Can it be used as a substitute for a commercial loan application?

Answer:

A borrower's statement of purpose for a loan (a business purpose statement) is a factor that may be considered when determining whether a loan transaction is primarily for an exempt purpose and exempt from Reg Z. See the Official Staff Commentary to Reg Z section 226.3(a).

First published on BankersOnline.com 12/08/08