Use of 7(a) Loan Proceeds

If you are awarded a 7(a) loan, the loan proceeds may be used to establish a new business or to assist in the acquisition, operation, or expansion of an existing business.
Eligible Use of 7(a) Loan Proceeds Include (Non-Exclusive):

The purchase land or buildings, to cover new construction as well as expansion or conversion of existing facilities

The purchase of equipment, machinery, furniture, fixtures, supplies, or materials

Long-term working capital, including the payment of accounts payable and/or the purchase of inventory

Short-term working capital needs, including seasonal financing, contract performance, construction financing and export production

Financing against existing inventory and receivable under special conditions

The refinancing of existing business indebtedness that is not already structured with reasonable terms and conditions

To purchase an existing business

SBA loans cannot be used for these purposes:

To refinance existing debt where the lender is in a position to sustain a loss and SBA would take over that loss through refinancing

To effect a partial change of business ownership or a change that will not benefit the business

To permit the reimbursement of funds owed to any owner, including any equity injection or injection of capital for the business's continuance until the loan supported by SBA is disbursed

To repay delinquent state or federal withholding taxes or other funds that should be held in trust or escrow

For a non-sound business purpose

If you are unsure whether or not your anticipated use of funds is allowed, check with your SBA approved lender.