SBA 7(a) Q&A
Short answer
An SBA 7(a) loan can finance the purchase of raw land for immediate business use and development, but not for speculative purposes or future development. The loan must include funds for construction and the business must occupy at least 51% of the property.
The SBA allows financing for real estate that will be occupied and used by the small business. If raw land is purchased, it must be part of a project that includes construction or renovation for the borrower's business operations, not just holding the land for future, uncertain use. A construction plan and budget are required.
If you purchase a $200,000 plot of raw land to build a $500,000 manufacturing facility for your acquired business, the SBA loan could cover both the land and construction, provided you have detailed plans and permit approvals, and your business will occupy at least 51% of the facility.
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 2026-06-14. 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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