SBA loan basics
Short answer
Yes, a portion of an SBA 7(a) loan can be allocated for working capital, which can be used to cover various short-term operating expenses, including rent, utilities, and payroll.
Working capital is a permitted use of SBA 7(a) loan proceeds. These funds are intended to cover eligible operational expenses such as inventory, supplies, salaries, rent, utilities, and other costs incurred in the normal course of business. This helps businesses manage cash flow, especially during periods of growth or transition.
A consulting firm experiences a temporary dip in client projects and needs $75,000 to cover payroll, office rent, and utility bills for the next three months. They can apply for an SBA 7(a) loan that includes a working capital component to bridge this gap, allowing them to maintain operations until new contracts materialize.
Insider move
Lenders evaluate the business's projections for how the working capital will improve its financial standing and ensure the funds are not used for ineligible purposes like owner distributions or speculative investments. They look for a clear plan to repay the working capital.
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 2026-06-14. 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 what it can be used for
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