Glossary · Doing the deal
In short
This is when loan proceeds are used for purposes other than what was approved in the loan authorization. It's a serious violation and can lead to immediate default, jeopardizing your deal.
The SBA is very strict about how loan funds are used. Every dollar must go towards approved uses, such as purchasing assets, paying seller notes, or providing working capital. Any attempt to "round-trip" funds or use them for personal expenses will trigger issues. Your lender will monitor disbursements closely through disbursement control.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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