Glossary · The loan itself
In short
This SBA requirement means the loan proceeds must be used for a legitimate, viable business activity that benefits the small business. It prevents misuse of funds.
Every dollar of your SBA loan must have a sound business purpose. For acquisitions, this means using funds for the purchase price, working capital, or eligible leasehold improvements. Lenders will scrutinize your Use of proceeds to ensure compliance and a reasonable business plan.
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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