{"ok":true,"canonical_url":"https://dealroom.so/glossary/eligible-use-of-funds","api_url":"https://dealroom.so/api/public/glossary/eligible-use-of-funds","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-16","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"eligible-use-of-funds","term":"Eligible Use of Funds","group":"The loan itself","definition":"The specific purposes for which an SBA 7(a) loan can be used, as defined by SBA rules. Funds must directly support the business acquisition or its operations; using them for personal expenses is strictly prohibited.","what_it_means":"SBA 7(a) loan proceeds are primarily for business acquisition, working capital, equipment, or real estate. You cannot use them to pay off personal debt, fund passive investments, or for speculative purposes. Your lender will scrutinize the entire project budget to ensure all uses align with SBA guidelines.","url":"https://dealroom.so/glossary/eligible-use-of-funds","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":"use-of-proceeds","term":"Use of proceeds","url":"https://dealroom.so/glossary/use-of-proceeds"},{"slug":"total-project-costs","term":"Total project costs","url":"https://dealroom.so/glossary/total-project-costs"},{"slug":"working-capital","term":"Working capital","url":"https://dealroom.so/glossary/working-capital"},{"slug":"business-acquisition-loan","term":"Business acquisition loan","url":"https://dealroom.so/glossary/business-acquisition-loan"}],"related_questions":[{"question":"Can I use funds from a personal line of credit as part of my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-funds-from-a-personal-line-of-credit-as-part-of-my-equity-injection"},{"question":"Are funds from a bridge loan eligible to satisfy the required equity injection?","url":"https://dealroom.so/sba-7a/questions/are-funds-from-a-bridge-loan-eligible-to-satisfy-the-required-equity-injection"},{"question":"Can I use funds from a home equity line of credit for my 10% equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-funds-from-a-home-equity-line-of-credit-for-my-10-equity-injection"},{"question":"Can I use funds from a personal line of credit for my SBA 7(a) equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-funds-from-a-personal-line-of-credit-for-my-sba-7-a-equity-injection"},{"question":"Can I use funds from the sale of my personal investments, like stocks, for my down payment?","url":"https://dealroom.so/sba-loans/basics/can-i-use-funds-from-the-sale-of-my-personal-investments-like-stocks-for-my-down-payment"},{"question":"Can I use funds from an inheritance received shortly before closing as part of my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-funds-from-an-inheritance-received-shortly-before-closing-as-part-of-my-equity-i"}]},"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 — Eligible Use of Funds","url":"https://dealroom.so/glossary/eligible-use-of-funds","source_type":"DealRoom Data"}}