# What does SBA consider a speculative business?

**Short answer:** A business that holds an item until its price rises, or takes a risky chance at an unusually large profit. Named examples include oil wildcatting, dealing in stocks or commodity futures, and research and development. Source: 13 CFR § 120.110(s); SOP 50 10 8.1, Sec. A, Ch. 1, Para. E.

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Last checked: 2026-11-09

A speculative business holds an item for a price increase or takes a high risk for an unusually large profit. 13 CFR § 120.110(s) makes speculative businesses ineligible. SOP 50 10 8.1, Sec. A, Ch. 1, Para. E gives the examples.

## Named as speculative

- Wildcatting in oil.
- Dealing in stocks, bonds, commodity futures and other financial instruments.
- Mining gold or silver in other than established fields.
- Research and development.
- Building homes for future sale, except under the 7(a) Builders CAPLines program.

## Named as not speculative

These businesses may be eligible:

- A business, such as a grain elevator, that uses a commodity contract to lock in a price.
- A farmer who uses a commodity contract to lock in the sale price of a harvest.
- A business drilling for oil in established fields.
- A business building a home under contract with an identified purchaser.

## What the SOP leaves open

The SOP lists research and development with no definition or revenue test. It does not mention crypto trading or mining by name. If either touches your business, raise it with your lender early.

## Sources

- [13 CFR § 120.110(s)](https://www.ecfr.gov/current/title-13/section-120.110)
- [SOP 50 10 8.1, Sec. A, Ch. 1, Para. E, Speculation (about p. 27)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)