SBA 7(a) Q&A
Short answer
Yes, an SBA 7(a) loan can be used to finance leasehold improvements for a business operating in leased premises, provided they are permanent and enhance the property's value for the business.
Leasehold improvements are considered eligible uses of SBA 7(a) loan proceeds. The improvements must be affixed to the property, essential for the business's operations, and typically require a lease term that provides sufficient time for the business to benefit from the investment and repay the loan.
If you're buying a restaurant for $400,000 and plan $75,000 in kitchen and dining room upgrades to the leased space, the SBA 7(a) loan can cover the $400,000 acquisition and the $75,000 for leasehold improvements, totaling $475,000.
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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