Can I use an SBA loan for personal expenses?
Short answer
No. SOP 50 10 8.1, Sec. B, Ch. 2, Para. A says proceeds must be used exclusively for business-related purposes, and 13 CFR 120.130(f) bars any purpose that does not benefit the business. On SBA Form 1919 you certify proceeds go only to the business.
No. An SBA loan is a business loan. 13 CFR 120.120 requires a small business to use it for sound business purposes. 13 CFR 120.130(f) bars a purpose that does not benefit the small business.
What you sign
On SBA Form 1919 (02/2025), you certify that proceeds "will be used only for the Applicant business" as the lender or SBA approved. The same form warns that knowingly making a false statement to obtain a guaranteed loan is punishable. It cites 18 U.S.C. 1001 and 3571, 15 U.S.C. 645 and, at a federally insured institution, 18 U.S.C. 1014.
Where the personal line shows up
- Debt payoff. You certify that any credit card, home equity line of credit (HELOC) or balance sheet debt being refinanced was used exclusively for the business (Sec. B, Ch. 6, Para. D.8).
- Farms. Operating expenses exclude personal or family living expenses, and refinancing excludes personal or family debt (Sec. A, Ch. 3, Para. A.3).
- 504 refinancing. Personal purchases on a card or line must be identified and deducted (Sec. C, Ch. 1, Para. C.10.a.iv).
Fair pay is different
Compensation for services actually rendered at a fair and reasonable rate is allowed (Sec. A, Ch. 3, Para. B.1). What you do with your own salary is your business.
SOP 50 10 8.1 publishes no penalty schedule for money spent on the wrong thing. Your note and other loan documents set the default terms, so read them.
Sources
- 13 CFR § 120.120
- 13 CFR § 120.130
- SOP 50 10 8.1, Sec. B, Ch. 2, Para. A, Eligible Uses of Proceeds (p. 125)
- SBA Form 1919 (02/2025), certifications
- SOP 50 10 8.1, Sec. B, Ch. 6, Para. D.8, Borrower Certifications (Para. D begins p. 207)
- SOP 50 10 8.1, Sec. A, Ch. 3, Para. A, Eligible Uses of Proceeds, Para. A.3 (p. 51)
- SOP 50 10 8.1, Sec. C, Ch. 1, Para. C.10.a.iv, Eligible Business Expenses (Para. C begins p. 226)
- SOP 50 10 8.1, Sec. A, Ch. 3, Para. B, Restrictions on Uses of Proceeds, Para. B.1 (p. 53)
Ask lending partners about your loan
Tell us the amount you need and what it is for. We refer you to lenders that may fund businesses like yours, and it costs you nothing.
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