{"ok":true,"canonical_url":"https://dealroom.so/glossary/construction-costs","api_url":"https://dealroom.so/api/public/glossary/construction-costs","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"construction-costs","term":"Construction costs","group":"Reading the business","definition":"These are expenses for building new structures. For a buyer, knowing these costs helps assess if a business's expansion plans are feasible and if the property value reflects potential future outlays.","what_it_means":"If you're acquiring a business that plans to build, factor these costs into your total project budget. SBA 7(a) loans can sometimes finance new construction, but it adds complexity and additional due diligence, like appraisals and environmental reviews. Understand if the seller's financials account for future construction needs.","url":"https://dealroom.so/glossary/construction-costs","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"renovation-expenses","term":"Renovation expenses","url":"https://dealroom.so/glossary/renovation-expenses"},{"slug":"appraisal","term":"Appraisal","url":"https://dealroom.so/glossary/appraisal"},{"slug":"environmental-consultant","term":"Environmental consultant","url":"https://dealroom.so/glossary/environmental-consultant"},{"slug":"use-of-proceeds","term":"Use of proceeds","url":"https://dealroom.so/glossary/use-of-proceeds"}],"related_questions":[{"question":"Are closing costs, like attorney fees, eligible to be part of the project costs for an SBA loan?","url":"https://dealroom.so/sba-7a/questions/are-closing-costs-like-attorney-fees-eligible-to-be-part-of-the-project-costs-for-an-sba-l"},{"question":"Can an SBA 7(a) loan cover construction or renovation of a business property?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-cover-construction-or-renovation-of-a-business-property"},{"question":"Can an SBA 7(a) loan be used for construction or renovation of business property?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-used-for-construction-or-renovation-of-business-property"},{"question":"Can an SBA 7(a) loan be used to buy a commercial building currently under construction?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-be-used-to-buy-a-commercial-building-currently-under-construction"},{"question":"Can I use an SBA 7(a) loan for construction or renovation of a business property?","url":"https://dealroom.so/sba-loans/basics/can-i-use-an-sba-7-a-loan-for-construction-or-renovation-of-a-business-property"},{"question":"Can I use an SBA 7(a) loan to finance renovations or new construction for my business?","url":"https://dealroom.so/sba-loans/basics/can-i-use-an-sba-7-a-loan-to-finance-renovations-or-new-construction-for-my-business"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Construction costs","url":"https://dealroom.so/glossary/construction-costs","source_type":"DealRoom Data"}}