{"ok":true,"canonical_url":"https://dealroom.so/glossary/construction-loan","api_url":"https://dealroom.so/api/public/glossary/construction-loan","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-loan","term":"Construction loan","group":"The loan itself","definition":"A construction loan funds new construction or significant renovations, typically disbursed in stages as work progresses. While an SBA 7(a) can fund real estate, it's not a true construction loan product in the conventional sense.","what_it_means":"For a business acquisition, the 7(a) loan can include funds for acquiring owner-occupied commercial real estate and minor leasehold improvements. However, if your deal involves significant ground-up construction or major rehabilitation, the 7(a) program is less suitable, or you'll need a separate conventional construction loan first, followed by a 7(a) to refinance it. Understand the scope of any real estate work.","url":"https://dealroom.so/glossary/construction-loan","official_sources":[{"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"},{"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"}],"related":[{"slug":"owner-occupied-commercial-real-estate","term":"Owner-occupied commercial real estate","url":"https://dealroom.so/glossary/owner-occupied-commercial-real-estate"},{"slug":"business-real-estate","term":"Business real estate","url":"https://dealroom.so/glossary/business-real-estate"},{"slug":"leasehold-improvement","term":"Leasehold improvement","url":"https://dealroom.so/glossary/leasehold-improvement"},{"slug":"7a-loan","term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"}],"related_questions":[{"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"},{"question":"Can I use an SBA 7(a) loan to finance a new business location or building construction?","url":"https://dealroom.so/sba-loans/basics/can-i-use-an-sba-7-a-loan-to-finance-a-new-business-location-or-building-construction"}]},"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 loan","url":"https://dealroom.so/glossary/construction-loan","source_type":"DealRoom Data"}}