SBA loan basics
Short answer
Yes, an SBA 7(a) loan can cover leasehold improvements, which are renovations or upgrades to a leased space, making it suitable for the business's operations.
Leasehold improvements are considered an eligible use of SBA 7(a) loan proceeds. This includes expenses related to renovating, remodeling, or building out a leased commercial space to meet the specific needs of the business. The loan term for leasehold improvements is typically tied to the useful life of the improvements or the remaining term of the lease, usually capped at 10 years.
A new restaurant signs a lease for a space that requires significant interior build-out, including kitchen installation, dining area finishes, and plumbing. A $200,000 SBA 7(a) loan can finance these leasehold improvements.
Insider move
Lenders review the lease agreement to ensure the term supports the proposed improvements and the business has sufficient control over the property. They also assess the cost and necessity of the improvements for the business's operations.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
SBA 7(a) Loans Overview
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.
More on what it can be used for
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