Proceeds from a home equity installment loan will be used to payoff an existing home equity loan with the majority of the funds being used for business purposes. Am I correct in stating that rescission does NOT apply since the credit extended is primarily for business purposes?

§226.3: Exempt Transactions (01/01/93)

This regulation does not apply to the following:4

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4 The provisions in §26.12(a) and (b) governing the issuance of credit cards and the liability for their unauthorized use apply to all credit cards, even if the credit cards are issued for use in connection with extensions of credit that otherwise are exempt under this section.


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(a) Business, commercial, agricultural, or organizational credit.

(1) An extension of credit primarily for a business, commercial or agricultural purpose.