SBA loan basics
Short answer
Yes, an SBA 7(a) loan can be used to construct a new commercial building for your business.
SBA 7(a) loan proceeds can finance the purchase of land and the construction of new facilities, as well as the renovation, improvement, or expansion of existing facilities. The building must be used for the business's operations, and typically at least 51% of the property must be occupied by the borrowing business.
A growing manufacturing company wants to build a larger factory. They secure an SBA 7(a) loan of $2.5 million to purchase a parcel of land and cover the construction costs for their new facility, allowing for future expansion.
Insider move
Lenders will require thorough construction plans, cost estimates, and environmental assessments. They also verify that the business has the capacity to manage the construction project and the financial strength to cover potential overruns.
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
SBA 7(a) Loans Overview
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.
More on use of proceeds
Terms in this answer
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