Glossary · The loan itself
Eligible Use of Proceeds
In short
The specific purposes for which an SBA 7(a) loan can be used, as defined by SBA rules. This includes business acquisition, working capital, real estate, and equipment.
What it means in a deal
Your lender must ensure all funds from your 7(a) loan are applied to eligible uses. For an acquisition, this typically covers the purchase price, working capital, equipment, and sometimes real estate. Non-eligible uses, like speculative investments or personal expenses, will cause your loan to be denied.
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 Use of Proceeds
- Are proceeds from personal investment sales eligible for equity injection?
- Can I use proceeds from selling my primary residence as part of my equity injection?
- Can I use proceeds from the sale of personal crypto assets for my equity injection?
- What are a lender's responsibilities concerning the proper use of 7(a) loan proceeds by the borrower?
- Can I use proceeds from selling personal real estate as part of my SBA 7(a) equity injection?
- What is the lender's responsibility for validating the business purpose and use of proceeds certified on SBA Form 1919?
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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