SBA loan basics
Short answer
Yes, an SBA 7(a) loan can be used to purchase land, provided the land is used for an eligible business purpose, such as constructing a new facility or expanding an existing one.
The acquisition of land is an eligible use of 7(a) loan proceeds. The land must be reasonably necessary for the business's operations and cannot be for speculative purposes or unrelated to the small business's activities.
A manufacturing company wants to expand its production capacity and needs to buy an adjacent 2-acre parcel of land. An SBA 7(a) loan can finance this land purchase as part of a larger expansion project.
Insider move
Lenders verify that the land purchase aligns with the business's operational needs and growth plan, ensuring it's not a speculative investment. They assess the land's value, potential environmental risks, and its role in supporting the business's long-term viability.
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.
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