{"ok":true,"canonical_url":"https://dealroom.so/glossary/use-of-loan-proceeds","api_url":"https://dealroom.so/api/public/glossary/use-of-loan-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":"use-of-loan-proceeds","term":"Use of Loan Proceeds","group":"The loan itself","definition":"This specifies exactly what the SBA loan funds can be spent on. The SBA has strict rules for eligible uses to ensure the money supports small business growth.","what_it_means":"Your SBA loan can cover business acquisition costs, working capital, inventory, equipment, and real estate. It generally cannot be used for speculative investments or to refinance existing debt unless it meets specific criteria. Your lender will meticulously document every dollar's use in the SBA Loan Authorization.","url":"https://dealroom.so/glossary/use-of-loan-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":"sba-loan-authorization","term":"SBA Loan Authorization","url":"https://dealroom.so/glossary/sba-loan-authorization"},{"slug":"working-capital","term":"Working capital","url":"https://dealroom.so/glossary/working-capital"},{"slug":"total-project-costs","term":"Total project costs","url":"https://dealroom.so/glossary/total-project-costs"},{"slug":"business-acquisition-loan","term":"Business acquisition loan","url":"https://dealroom.so/glossary/business-acquisition-loan"}],"related_questions":[{"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":"How does a lender ensure compliance with the 'use of proceeds' requirements for a 7(a) loan, particularly for working capital?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-ensure-compliance-with-the-use-of-proceeds-requirements-for-a-7-a-loan-p"},{"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 — Use of Loan Proceeds","url":"https://dealroom.so/glossary/use-of-loan-proceeds","source_type":"DealRoom Data"}}