Glossary · The loan itself
Eligible business purpose
In short
This refers to the specific uses of SBA loan funds that are permitted by the SBA's regulations. Not all business expenses qualify for SBA financing.
What it means in a deal
For a 7(a) acquisition, eligible purposes include buying an existing business, acquiring real estate, purchasing equipment, and providing working capital. Ineligible uses, such as speculative investments or certain types of refinancing, will stop your loan. Ensure your Use of proceeds aligns perfectly with SBA rules.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Eligible business purpose
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Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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