{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/can-i-use-the-working-capital-portion-of-my-sba-7-a-loan-to-repay-a-short-term-bridge-loan","api_url":"https://dealroom.so/api/public/questions/can-i-use-the-working-capital-portion-of-my-sba-7-a-loan-to-repay-a-short-term-bridge-loan","question":"Can I use the working capital portion of my SBA 7(a) loan to repay a short-term bridge loan used for acquisition expenses?","topic":"Working capital","audience":"borrower","bot_mode":"buyer","short_answer":"Yes, the working capital portion of an SBA 7(a) loan can generally be used to repay a short-term bridge loan that financed eligible acquisition-related expenses.","rule":"Working capital funds can be used for various operational needs and expenses directly related to the acquisition and launch of the business. If a bridge loan was used to cover initial, eligible acquisition costs (e.g., inventory, pre-paid expenses, initial payroll) before the SBA loan closed, repaying it with working capital is usually permissible.","example":"A buyer secured a $30,000 short-term bridge loan to cover initial inventory and three months of rent for the acquired business before the SBA 7(a) loan closed. Once the SBA loan with a $50,000 working capital component is funded, the buyer can use $30,000 of that working capital to repay the bridge loan.","what_lenders_check":"Lenders will verify that the original bridge loan was used for eligible acquisition expenses. They require documentation of the bridge loan's terms, its use of proceeds, and the repayment to ensure it aligns with SBA guidelines for working capital utilization.","required_facts":["Bridge loan repayment","Acquisition expenses","Working capital use","Eligible costs","Documentation"],"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 are the specific categories of working capital that can be financed by an SBA 7(a) loan for a new business acquisition?","url":"https://dealroom.so/sba-7a/questions/what-are-the-specific-categories-of-working-capital-that-can-be-financed-by-an-sba-7-a-loa"},{"question":"Can an SBA 7(a) loan finance the purchase of initial inventory for a retail business acquisition?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-finance-the-purchase-of-initial-inventory-for-a-retail-business-acquis"},{"question":"Can an SBA 7(a) loan include funds for operational expenses like payroll and utilities for the first few months after acquisition?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-include-funds-for-operational-expenses-like-payroll-and-utilities-for-"},{"question":"Can an SBA 7(a) loan be used to refinance existing business debt as part of an acquisition?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-used-to-refinance-existing-business-debt-as-part-of-an-acquisition"},{"question":"What is the SBA's requirement for a buyer's post-closing working capital position?","url":"https://dealroom.so/sba-7a/questions/what-is-the-sba-s-requirement-for-a-buyer-s-post-closing-working-capital-position"},{"question":"Can an SBA 7(a) loan be used to acquire an existing business with existing business debt?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-used-to-acquire-an-existing-business-with-existing-business-debt"}],"related_terms":[{"term":"Ability to repay","url":"https://dealroom.so/glossary/ability-to-repay"},{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"},{"term":"7(a) Working Capital Pilot Program","url":"https://dealroom.so/glossary/7-a-working-capital-pilot-program"},{"term":"Aggregate SBA 7(a) Loan Eligibility","url":"https://dealroom.so/glossary/aggregate-sba-7-a-loan-eligibility"},{"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"}],"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/sba-7a/questions/can-i-use-the-working-capital-portion-of-my-sba-7-a-loan-to-repay-a-short-term-bridge-loan","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."]}