SBA 7(a) Q&A
Short answer
Yes, working capital from an SBA 7(a) loan can be used to pay certain seller's outstanding obligations if they are current business operating expenses.
SBA working capital can be used for eligible business operating expenses. If the seller's outstanding obligations are legitimate current accounts payable or other operational expenses necessary for the acquired business's immediate function, they can be covered. However, it cannot be used for seller's personal debts or undisclosed liabilities.
A buyer acquires a business and needs $15,000 from the working capital portion of their SBA loan to immediately pay the seller's overdue utility bills and a critical supplier invoice to keep operations running.
Insider move
Lenders will scrutinize the nature of these obligations to ensure they are bona fide business expenses and not undisclosed liabilities or personal debts of the seller. Proper documentation and justification for their urgency are essential.
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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