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Home / Answers / Use of proceeds / Can an SBA loan be used for floor plan financing?

Can an SBA loan be used for floor plan financing?

Janover Capital editorial team · Checked November 8, 2026

Short answer

No. Floor plan financing is a prohibited use of SBA loan proceeds under 13 CFR 120.130(c) and SOP 50 10 8.1, Sec. A, Ch. 3, Para. B.3. CAPLines, Manufacturers' Access to Revolving Credit (MARC) and Export Working Capital Program (EWCP) loans repeat the bar in their own chapters.

No. Section A, Chapter 3, Paragraph B.3 of SOP 50 10 8.1 lists floor plan financing as a prohibited use. The regulation is 13 CFR 120.130(c).

The bar also covers replacing funds you used or borrowed for floor plan financing. Appendix 14 adds that proceeds may not refinance debt first incurred for an ineligible purpose, unless the condition causing it no longer exists.

Programs that repeat the bar

What this leaves open for dealers

The rule bars a use of proceeds. It does not list dealerships as ineligible businesses. A dealer could still ask a lender to finance eligible uses, such as real estate, equipment or working capitalMoney for day-to-day costs such as payroll, rent and inventory. Full definition.

Inventory is an eligible 7(a) use in general (Sec. A, Ch. 3, Para. A.2.a). The SOP does not define floor plan financing, so the line between it and inventory financing is not spelled out. Ask your lender how it reads that line before you plan around it.

Sources

  1. SOP 50 10 8.1, Sec. A, Ch. 3, Para. B, Restrictions on Uses of Proceeds, Para. B.3 (p. 53)
  2. 13 CFR ยง 120.130
  3. SOP 50 10 8.1, Sec. B, Ch. 4, Para. A, CAPLines uses of proceeds (p. 144)
  4. SOP 50 10 8.1, Sec. B, Ch. 3, Para. A.2, MARC ineligible uses (p. 135)
  5. SOP 50 10 8.1, Sec. B, Ch. 5, Para. B.3, EWCP uses of proceeds (Para. B begins p. 175)
  6. SOP 50 10 8.1, App. 14, Para. A, General Requirements, other conditions on refinancing (p. 355)

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