{"ok":true,"canonical_url":"https://dealroom.so/glossary/eligible-use-of-proceeds","api_url":"https://dealroom.so/api/public/glossary/eligible-use-of-proceeds","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":"eligible-use-of-proceeds","term":"Eligible Use of Proceeds","group":"The loan itself","definition":"The specific purposes for which an SBA 7(a) loan can be used, as defined by SBA rules. This includes business acquisition, working capital, real estate, and equipment.","what_it_means":"Your lender must ensure all funds from your 7(a) loan are applied to eligible uses. For an acquisition, this typically covers the purchase price, working capital, equipment, and sometimes real estate. Non-eligible uses, like speculative investments or personal expenses, will cause your loan to be denied.","url":"https://dealroom.so/glossary/eligible-use-of-proceeds","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":"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":"fixed-asset-acquisition","term":"Fixed Asset Acquisition","url":"https://dealroom.so/glossary/fixed-asset-acquisition"},{"slug":"inventory-acquisition","term":"Inventory Acquisition","url":"https://dealroom.so/glossary/inventory-acquisition"}],"related_questions":[{"question":"Are proceeds from personal investment sales eligible for equity injection?","url":"https://dealroom.so/sba-7a/questions/are-proceeds-from-personal-investment-sales-eligible-for-equity-injection"},{"question":"Can I use proceeds from selling my primary residence as part of my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-proceeds-from-selling-my-primary-residence-as-part-of-my-equity-injection"},{"question":"Can I use proceeds from the sale of personal crypto assets for my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-proceeds-from-the-sale-of-personal-crypto-assets-for-my-equity-injection"},{"question":"What are a lender's responsibilities concerning the proper use of 7(a) loan proceeds by the borrower?","url":"https://dealroom.so/for-lenders/questions/what-are-a-lender-s-responsibilities-concerning-the-proper-use-of-7-a-loan-proceeds-by-the"},{"question":"Can I use proceeds from selling personal real estate as part of my SBA 7(a) equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-proceeds-from-selling-personal-real-estate-as-part-of-my-sba-7-a-equity-injectio"},{"question":"What is the lender's responsibility for validating the business purpose and use of proceeds certified on SBA Form 1919?","url":"https://dealroom.so/for-lenders/questions/what-is-the-lender-s-responsibility-for-validating-the-business-purpose-and-use-of-proceed"}]},"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 Proceeds","url":"https://dealroom.so/glossary/eligible-use-of-proceeds","source_type":"DealRoom Data"}}