{"ok":true,"canonical_url":"https://dealroom.so/glossary/use-of-proceeds","api_url":"https://dealroom.so/api/public/glossary/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":"use-of-proceeds","term":"Use of proceeds","group":"The loan itself","definition":"This details exactly how the money from your SBA loan will be spent. The SBA has strict rules on what the loan funds can and cannot be used for in an acquisition.","what_it_means":"Your lender will specify the use of proceeds in the SBA Loan Authorization, covering items like the business purchase price, working capital, inventory, and eligible closing costs. You cannot use the funds for non-business purposes, risky investments, or to refinance ineligible debt. Any deviation can jeopardize your loan.","url":"https://dealroom.so/glossary/use-of-proceeds","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":"total-project-costs","term":"Total project costs","url":"https://dealroom.so/glossary/total-project-costs"},{"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"}],"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":"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"},{"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"}]},"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 proceeds","url":"https://dealroom.so/glossary/use-of-proceeds","source_type":"DealRoom Data"}}