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.