Can an SBA loan be used to buy equipment?
Short answer
Yes. Any SBA loan can buy or lease fixed assets (13 CFR 120.120(a)(6)). A 7(a) equipment loan can run 10 years, or up to 15 years if the IRS asset class useful life supports it. See SOP 50 10 8.1, App. 17.
Yes. 13 CFR 120.120(a)(6) lets a borrower acquire fixed assets, by purchase or lease, and install them. Section A, Chapter 3, Paragraph A.1.f of SOP 50 10 8.1 repeats the rule.
7(a) and SBA Express
Equipment, fixtures or furniture can run 10 years, or up to 15 years if the IRS asset class useful life supports it (App. 17, Para. A.2). Up to 12 more months can be added when needed to finish installation. SBA's 7(a) page also lists AI-related expenses with machinery and equipment.
On a Standard 7(a) or 7(a) Small loan, the lender must generally take a first lien on assets the loan buys (App. 19, Paras. B.1 and B.2). On an SBA Express loan of $50,000 or less, collateralProperty a lender can take and sell if a loan is not repaid. is not required. Above that, the lender may use its own collateral policies for similar non-SBA loans (App. 19, Para. B.3).
504 projects
Machinery and equipment must have a useful life of at least 10 years (Sec. C, Ch. 1, Para. C.2). The project can include purchase, transportation, dismantling and installation costs. Short-term equipment, furniture and furnishings are excluded unless essential to and a minor portion of the project (13 CFR 120.884(e)).
Buying American
To the extent practicable, you agree to buy American-made equipment and products with the proceeds (Sec. A, Ch. 1, Para. C.1).
Sources
- 13 CFR § 120.120
- SOP 50 10 8.1, Sec. A, Ch. 3, Para. A, Eligible Uses of Proceeds, Para. A.1.f (p. 51)
- SOP 50 10 8.1, App. 17, Para. A.2, Loan Maturity Requirements (p. 390)
- SOP 50 10 8.1, App. 19, Paras. B.1-B.3, Collateral (Para. B begins p. 408)
- SOP 50 10 8.1, Sec. C, Ch. 1, Para. C.2, Machinery and Equipment (Para. C begins p. 226)
- 13 CFR § 120.884
- SOP 50 10 8.1, Sec. A, Ch. 1, Para. C.1, Located in the United States (p. 14)
- sba.gov/loans/7a-loans, read November 8, 2026
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