SBA 7(a) Q&A
Short answer
Yes, an SBA 7(a) loan can be used to finance leasehold improvements to property leased by the acquired business, provided they are permanent and enhance the business.
Leasehold improvements are an eligible use of 7(a) loan proceeds. These are permanent enhancements to a leased space that contribute to the business's operations. The lender will require a lease agreement with sufficient term remaining, often matching or exceeding the loan term.
If you acquire a restaurant business that operates in a leased space, and you plan to invest $75,000 in kitchen upgrades and dining area renovations, these leasehold improvements can be included in your SBA 7(a) loan request.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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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