Glossary · The loan itself
In short
Using SBA loan funds for purposes not permitted by SBA rules. This can lead to the SBA denying its guaranty or even requiring immediate loan repayment.
SBA 7(a) loan funds must be used for specific business purposes like acquiring a business, working capital, or equipment. They cannot be used for speculative investments, passive real estate, or repaying certain types of personal debt. Your lender will scrutinize the use of funds; ensure your planned uses align precisely with SBA guidelines.
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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