SBA loan basics
Short answer
Yes, SBA 7(a) loans are commonly used to finance the acquisition of existing businesses or franchises. This includes purchasing assets, inventory, and even the goodwill of an established enterprise.
The 7(a) program specifically allows for financing the purchase of an existing business, including real estate, equipment, inventory, and intangible assets like goodwill. For franchises, the franchise agreement must be reviewed by the SBA or listed on the SBA Franchise Directory to ensure eligibility and that the agreement does not contain prohibited clauses.
A buyer wants to acquire an existing auto repair shop for $700,000. An SBA 7(a) loan can finance the purchase of the shop's building, tools, current inventory, and the established customer base (goodwill), with the buyer providing a required down payment.
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 2026-06-13. 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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