{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/can-an-sba-7-a-loan-cover-property-taxes-and-insurance-premiums-due-at-closing-for-acquire","api_url":"https://dealroom.so/api/public/questions/can-an-sba-7-a-loan-cover-property-taxes-and-insurance-premiums-due-at-closing-for-acquire","question":"Can an SBA 7(a) loan cover property taxes and insurance premiums due at closing for acquired real estate?","topic":"Uses of proceeds","audience":"lender","bot_mode":"lender","short_answer":"Yes, an SBA 7(a) loan can include funds to cover property taxes and insurance premiums that are due at closing as part of the total project costs for real estate acquisition.","rule":"Property taxes and insurance premiums incurred at closing are considered legitimate and necessary costs associated with the acquisition of real estate. These can be included in the total project costs financed by the 7(a) loan, similar to other closing costs. However, ongoing property taxes and insurance premiums post-closing are operational expenses and generally not financed by the loan.","example":"A borrower is acquiring a commercial property with a 7(a) loan. The closing statement includes $7,000 for prorated property taxes and a $3,000 annual insurance premium due upfront. The lender includes these as eligible uses of loan proceeds within the total project financing.","what_lenders_check":"Lenders must ensure that only taxes and insurance premiums due at closing are financed. Financing ongoing operational expenses can be considered an ineligible use of proceeds. Proper documentation of the closing statement is critical.","required_facts":["Due at closing","Real estate acquisition","Total project costs","Not ongoing expenses"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[{"question":"What is the maximum amount of working capital that can be included in a standard 7(a) loan for a business acquisition?","url":"https://dealroom.so/for-lenders/questions/what-is-the-maximum-amount-of-working-capital-that-can-be-included-in-a-standard-7-a-loan-"}],"related_terms":[{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"},{"term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"},{"term":"SBA 7(a) Loan Program","url":"https://dealroom.so/glossary/sba-7-a-loan-program"},{"term":"SBA 7(a) loan guaranty","url":"https://dealroom.so/glossary/sba-7-a-loan-guaranty"},{"term":"SBA 7(a) program","url":"https://dealroom.so/glossary/sba-7-a-program"},{"term":"Standard 7(a) loan","url":"https://dealroom.so/glossary/standard-7-a-loan"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/for-lenders/questions/can-an-sba-7-a-loan-cover-property-taxes-and-insurance-premiums-due-at-closing-for-acquire","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}