Glossary · The loan itself
In short
An ineligible use of SBA loan proceeds where the primary purpose is to profit from short-term market fluctuations or property value increases, rather than operating a business.
The SBA prohibits loans for speculative investments. This means you can't use a 7(a) loan to buy a business primarily to flip assets or hold real estate for appreciation. The loan must be for a bona fide operating business. Lenders will scrutinize your business plan to ensure it's not speculative.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
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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