What can an SBA 7(a) loan be used for?

A 7(a) loan can pay for almost any sound business purpose on the list in 13 CFR 120.120. Section A, Chapter 3, Paragraph A of SOP 50 10 8.1 sets out that list. The maximum for any one loan is $5,000,000.

Uses open to any SBA loan

• Buying land as part of an eligible project, and improving the site
• Buying, converting, expanding or renovating buildings
• Constructing new buildings
• Buying or leasing fixed assets and installing them

Uses open to 7(a) loans only

• Inventory, supplies and raw materials, including work in progress
• Working capital for everyday operations, including business software and cloud services
• Revolving lines of credit under CAPLines, SBA Express, Export Express and the Export Working Capital Program
• Standby letters of credit under CAPLines, Export Express or EWCP, when required as a bid bond, performance bond or advance payment guarantee

Uses added by other rules

13 CFR 120.120(c) and Appendix 14 allow refinancing of certain debts. 13 CFR 120.202 and Appendix 15 allow buying a business or an owner's interest. SBA's 7(a) page also lists multiple-purpose loans that combine these uses.

Every use must still clear the restrictions in 13 CFR 120.130. Some 7(a) programs are narrower. Manufacturers' Access to Revolving Credit (MARC) loans, for example, are limited to working capitalworking capitalMoney for day-to-day costs such as payroll, rent and inventory. Full definition and refinancing working capital debt (Sec. B, Ch. 3, Para. A.1). A lender applies its own credit policy on top of these rules. A use SBA allows may still be one that lender will not finance.