# What can a Contract CAPLine finance?

**Short answer:** Only the costs of one or more specific contracts, including allocable overhead. It cannot pay for profit, fixed assets, refinancing, permanent working capital or a contract already well under way (SOP 50 10 8.1, Sec. B, Ch. 4, Para. A.2).

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Last checked: 2026-11-08

A Contract CAPLine finances the costs of one or more specific contracts. That includes overhead and general and administrative expenses allocable to those contracts (SOP 50 10 8.1, Sec. B, Ch. 4, Para. A.2.b).

## Who qualifies

You must show you operate profitably based on prior completion of similar contracts. You also need the ability to bid, project costs and do the work. You must have the capacity to finish on time and at a profit (Para. A.2.a).

## What it cannot pay for

- Permanent working capital.
- Fixed assets.
- Delinquent taxes or similar trust funds.
- Existing debt.
- A contract in which significant performance has already begun.
- A change of ownership or floor plan financing.
- Mark-up or profit.

## How the amount is set

- Single contract, single payment: the sum of the contract's costs.
- Single contract, multiple payments: enough to cover 20% over the greatest projected cash deficit.
- Multiple contracts: the sum of the costs of all financed contracts (Para. B.1.d).

Advances for one contract may not be used on another, and payments on one contract must be applied to that contract (Para. A.2.c and d). Once SBA approves the line amount, the lender may advance against additional contracts without SBA approval. You and the lender must stay in compliance (Para. A.2.e).

## Sources

- [SOP 50 10 8.1, Sec. B, Ch. 4, Paras. A.2 (Para. A begins p. 144) and B.1 (p. 147)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)