SBA 7(a) Q&A
Short answer
Yes, the working capital portion of an SBA 7(a) loan can generally be used to repay a short-term bridge loan that financed eligible acquisition-related expenses.
Working capital funds can be used for various operational needs and expenses directly related to the acquisition and launch of the business. If a bridge loan was used to cover initial, eligible acquisition costs (e.g., inventory, pre-paid expenses, initial payroll) before the SBA loan closed, repaying it with working capital is usually permissible.
A buyer secured a $30,000 short-term bridge loan to cover initial inventory and three months of rent for the acquired business before the SBA 7(a) loan closed. Once the SBA loan with a $50,000 working capital component is funded, the buyer can use $30,000 of that working capital to repay the bridge loan.
Insider move
Lenders will verify that the original bridge loan was used for eligible acquisition expenses. They require documentation of the bridge loan's terms, its use of proceeds, and the repayment to ensure it aligns with SBA guidelines for working capital utilization.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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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