Glossary · The loan itself
Loan Proceeds
In short
These are the actual funds disbursed by the lender from your SBA 7(a) loan. They are strictly regulated and must be used for approved purposes outlined in the loan authorization.
What it means in a deal
Your loan proceeds will be used to purchase the business, pay for eligible closing costs, fund working capital, and potentially refinance existing business debt. Any funds not used for these approved purposes are considered overfinancing. The lender tracks these disbursements closely to ensure compliance.
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 Loan Proceeds
- Are proceeds from personal investment sales eligible for equity injection?
- Can cash-out loan proceeds go to the remaining owner in a buyout?
- Can proceeds from selling personal stocks or mutual funds count towards my equity injection?
- Can I use proceeds from selling personal real estate as an equity injection after closing?
- 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?
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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