Glossary · The loan itself
Uses of Proceeds
In short
This details exactly what the SBA loan money will be spent on, such as buying the business, inventory, or working capital. The SBA has strict rules on what the funds can be used for.
What it means in a deal
The SBA 7(a) loan proceeds must be used for eligible purposes, primarily the acquisition of the business, working capital, inventory, equipment, or real estate. Personal expenses or speculative investments are prohibited. This is detailed in your SBA Loan Authorization.
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 Uses of Proceeds
- What are the acceptable uses of 'working capital' funds from an SBA 7(a) loan?
- 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?
- Are marketing and advertising expenses allowed uses for 7(a) loan funds?
- What if the business for sale uses proprietary software or a unique technology?
- What are a lender's responsibilities concerning the proper use of 7(a) loan proceeds by the borrower?
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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