For SBA lenders
Short answer
There is no specific maximum *percentage* of the loan allocated to working capital, but it must be reasonable, justified by a business plan, and part of the total project costs, subject to the overall 7(a) loan maximum of $5 million.
Working capital is an eligible use of 7(a) loan proceeds, particularly for business acquisitions to cover initial operational expenses, inventory, and cash flow needs. While no explicit cap exists on the working capital component, it must be fully justified in the credit analysis and business plan, ensuring it's for legitimate operational purposes and not excessive or speculative.
A borrower acquires a business for $800,000 and requests an additional $150,000 for working capital to purchase inventory and cover initial payroll for three months. The lender underwrites the $150,000 working capital based on detailed projections and inventory requirements, ensuring it's reasonable for the business's operational cycle.
Insider move
Lenders must ensure that working capital requests are well-substantiated and do not serve as a hidden equity injection or fund speculative ventures. Overly large or unjustified working capital components can lead to questions from SBA during guaranty purchase review.
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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