Glossary · Reading the business
Project cost
In short
The sum of all expenses required to complete your business acquisition, including the purchase price, working capital, and eligible closing costs. This total determines the size of your SBA loan.
What it means in a deal
The "Total project costs" include the business purchase price, real estate (if applicable), equipment, necessary working capital, and "Eligible closing costs." The SBA loan funds a portion of these costs, and your equity injection covers the rest. Lenders scrutinize this breakdown to ensure all uses of proceeds are eligible.
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 Project cost
- Can closing costs such as legal and accounting fees be included in the total project cost for the 10% calculation?
- What percentage of the project cost does the SBA typically expect as a down payment?
- How does a lender request an increase to an authorized 7(a) loan amount due to unforeseen project cost increases?
- For an acquisition with significant goodwill, what maximum goodwill percentage can the SBA 7(a) loan finance relative to the total project cost?
- Are closing costs, like attorney fees, eligible to be part of the project costs for an SBA loan?
- If I buy a business with real estate, can the SBA loan finance a commercial renovation project costing $300,000?
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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