# Can a line of credit sit alongside an SBA acquisition loan?

**Short answer:** Yes. A conventional or government-guaranteed line can sit beside the 7(a) term loan. If it needs a first lien on the acquired receivables and inventory, 20% to 50% of day-one availability must fund part of the purchase. Source: SOP 50 10 8.1, App. 15, Para. C.3.d.

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Last checked: 2026-11-08

Yes. SOP 50 10 8.1, App. 15, Para. C.3.d, gives the borrower the option of a conventional or government-guaranteed line of credit to support working capital.

A change of ownership term loan normally holds a security interest in the receivables and inventory. Extra rules apply if the line must be in first lien position on those acquired assets.

## The first-lien condition

The lender can release those assets from the term loan only under these terms:

- No less than 20% and no more than 50% of day-one availability goes on the line at closing.
- That portion must fund the matching portion of the purchase.
- The lender keeps documentation of compliance in the loan file.

Day-one availability is the amount available on the first day loan proceeds are available. For an open revolver, use the committed limit. For an asset-based line, use the amount on the initial borrowing base certificate.

## An example

On a $200,000 committed revolver, between $40,000 and $100,000 would be applied to the purchase at closing.

## When this does not apply

The conditions do not apply to a line in second lien position, and the SOP gives SBA Express as an example. The lender may not use the option if day-one availability would be under 20%, given the line size or collateral advance rates.

## A related rule

If the lender waives equity on a Business Expansion or Owner Buyout, working capital must come from existing cash or a line of credit. See App. 15, Para. C.2.a.

## Sources

- [SOP 50 10 8.1, App. 15, Para. C.3.d (Para. C begins p. 371)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, App. 15, Para. C.2.a (Para. C begins p. 371)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)