What can SBA 7(a) loan proceeds be used for?

September 11, 2024

by a lender from North Carolina State University - Poole College of Management in Raleigh, NC, USA

SBA 7(a) loan proceeds can be used to:

Assist in the acquisition, operation or expansion of an existing business
Establish a new business
Provide long-term working capital and short-term working capital needs
Purchase equipment, machinery, furniture, fixtures, supplies or materials
Purchase real estate, including land and buildings
Construct a new building or renovate an existing building
Refinance existing business debt, under certain conditions
Buyout existing partners

Want to know more? Just ask!

Reply by a searcher
in Tyler, TX, USA

^redacted‌ we tend to think mostly to think about the acquisition, so this is helpful. When financing an expansion (i.e., new equipment) where the debt service cannot be supported until the additional capacity from the expansion is on line and producing, what would typically be the amortization schedule? Are most banks who would finance that open to an interest-only period? I'm working with a consulting client who is potentially interested in such a loan. Thanks!

Reply by a lender
from North Carolina State University in Raleigh, NC, USA

^redacted‌There is some flexibility around the structure of an expansion deal. If there is no real estate involved, you are looking at a 10-year amortization for a SBa 7(a) term loan. Happy to discuss in further detail. My email is redacted

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