32.105 Uses of contract financing.

      (a) Contract financing methods covered in this part are intended to be self-liquidating through contract performance. Consequently, agencies shall only use the methods for financing of contractor working capital, not for the expansion of contractor-owned facilities or the acquisition of fixed assets. However, under loan guarantees, exceptions may be made for-

           (1) Facilities expansion of a minor or incidental nature, if a relatively small part of the guaranteed loan is used for the expansion and the contractor’s repayment would not be delayed or impaired; or

           (2) Other instances of facilities expansion for which contract financing is appropriate under agency procedures.

      (b) The limitations in this section do not apply to contracts under which facilities are being acquired for Government ownership.