Glossary · The loan itself
Raw Land
In short
This refers to undeveloped land without structures or utilities. The SBA generally does not allow 7(a) loan proceeds to be used for the purchase of raw land if it's purely for investment.
What it means in a deal
While a 7(a) loan can finance commercial real estate for an owner-occupied business, it's not for speculative raw land purchases. If the business you're acquiring includes land, ensure there's a clear business purpose for that land and it's not purely for future development unrelated to the core business operations.
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 Raw Land
- What are the requirements if I plan to develop raw land purchased with an SBA loan?
- Can I use an SBA 7(a) loan to purchase raw land for future business use?
- What environmental due diligence is required for raw land purchased with an SBA 7(a) loan for future business use?
- Can I use an SBA 7(a) loan to buy inventory or pay for raw materials?
- Can the fair market value of raw materials I contribute to the acquired business count towards equity?
- Can an SBA 7(a) loan finance property improvements on leased land or buildings?
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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