SBA 7(a) Q&A
Short answer
Yes, the working capital portion of an SBA 7(a) loan can be used to purchase initial inventory for the acquired business.
SBA 7(a) loan proceeds designated for working capital can be used for various legitimate business purposes, including the purchase of initial inventory. This helps ensure the newly acquired business has the necessary stock to operate effectively from day one. It's considered an eligible use of funds to support the business's operations.
A buyer acquires a retail store for $700,000, and the loan includes $50,000 for working capital. $30,000 of that working capital can be allocated specifically to purchase new products to replenish shelves immediately after closing.
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
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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