Glossary · The loan itself
Use of funds
In short
This details exactly how the SBA loan proceeds will be spent, covering everything from the purchase price to working capital and fees. The SBA has strict rules on what funds can be used for.
What it means in a deal
Your lender will outline the total project costs and the specific uses for your SBA 7(a) loan proceeds in the SBA Loan Authorization. This includes the business acquisition, real estate, equipment, inventory, working capital, and closing costs. Ensure all your needs are covered and documented.
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 Use of funds
- Can I use funds from a personal line of credit as part of my equity injection?
- Can I use funds from a home equity line of credit for my 10% equity injection?
- Can I use funds from a personal line of credit for my SBA 7(a) equity injection?
- Can I use funds from the sale of my personal investments, like stocks, for my down payment?
- Can I use funds from an inheritance received shortly before closing as part of my equity injection?
- Can I use funds from a Certificate of Deposit (CD) that matures after closing 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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