# What can you spend an SBA microloan on?

**Short answer:** You can spend it on working capital and the purchase of materials, supplies, furniture, fixtures and equipment, under 13 CFR § 120.707(a). SBA's page also names inventory and machinery. You cannot use a microloan to pay existing debts or buy real estate.

Canonical page: https://www.sbaexpress.loans/answers/sba-microloan-eligible-uses/
Last checked: 2026-11-08

Microloans cover working capital and smaller business purchases. 13 CFR § 120.707(a) limits proceeds to working capital and the purchase of materials, supplies, furniture, fixtures and equipment. A borrower can also use proceeds to establish a nonprofit childcare business.

## Examples SBA gives

SBA's microloan page (read November 8, 2026) lists working capital, inventory, supplies, furniture, fixtures, machinery and equipment.

## What is excluded

SBA's page says microloan proceeds cannot be used to:

- Pay existing debts.
- Purchase real estate.

## If you need to refinance or buy property

A 7(a) loan can refinance certain business debts under SOP 50 10 8.1, Appendix 14. A 7(a) or 504 loan can finance owner-occupied real estate. A microloan cannot fill those roles.

## Limits from other rules

An intermediary can lend only to small businesses eligible for SBA financial assistance under Part 120 (13 CFR § 120.707(a)). The ineligible business types in 13 CFR § 120.110 still apply.

## Ask the intermediary

SBA says intermediaries make all credit decisions and set all terms. An intermediary's own rules may be narrower than the regulation. Tell it what the money will buy before you apply.

## Sources

- [13 CFR § 120.707](https://www.ecfr.gov/current/title-13/section-120.707)
- [13 CFR § 120.110](https://www.ecfr.gov/current/title-13/section-120.110)
- [sba.gov/loans/microloans (read November 8, 2026)](https://www.sba.gov/loans/microloans/)
- [SOP 50 10 8.1, App. 14 (p. 355)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)