8 Ways You Can Use an SBA 7(a) Loan for Your Business
Key Takeaways
- Flexible funding for business growth: SBA 7(a) loans can be used for multiple core business needs, like buying or upgrading property, buying equipment or technology, improving your space, refinancing business debt, or supporting everyday operations with working capital. This loan gives you room to invest where your business needs it most.
- Strategic improvements and acquisitions: Beyond just covering daily costs, you can use a 7(a) loan to help your business grow, whether that's acquiring another business, buying furniture and fixtures, or doing tenant improvements to make your space more functional or attractive.
- Limits on what you can't use it for: You cannot use SBA 7(a) funds for personal expenses or purposes that don't directly benefit your business (like paying personal bills). Also, some types of refinancing , like debt that's already reasonably structured under SBA rules or paying delinquent taxes are not allowed.
You know you’re looking for a 7(a) loan, but exactly how much can you do with the funds you get? There are many business goals you can meet after you’re approved, so knowing what you can use it for can help you figure out how much to apply for. Read on for just a few ways you can use the 7(a) to help your business succeed.
What Can SBA 7(a) Loans Be Used For?
SBA 7(a) loans can be used for a wide variety of business purposes, including short- and long-term working capital, business acquisitions or partner buyouts, tenant improvement projects, debt refinancing, and real estate and equipment purchases.
- Buy buildings or unimproved real estate for business purposes
- Upgrade or renovate your current business building
- Acquire furniture and fixtures for your office space
- Purchase new or used equipment
- Upgrade technology
- New construction and tenant improvements
- Refinance business debt
- Working capital
There are other ways to utilize your 7(a) loan. Work with your bank to find out if your goals can be met with a 7(a) loan.
Can I Use My SBA Loan for Anything?
No, while an SBA 7(a) loan can support multiple purposes, it cannot be used for everything!
What Can SBA Loans NOT be Used For?
7(a) cannot be used for refinancing debt that is reasonably structured (as defined by the SBA), to pay delinquent taxes, or for a loan that does not benefit your business directly. Check with your bank to see if the purpose for which you want to use the money is an approved use if it isn’t listed above.
Can SBA Loans be Used for Personal Expenses?
No, it cannot be used for any personal expenses. That said, it can be used to refinance personal debt, like credit cards, that were used solely for business expenses.
WaFd Bank is Here to Help
Our knowledgeable business bankers are available to help you manage success and have the expertise to become a trusted advisor to you and your team. With products that grow with your business and comprehensive tools to seamlessly manage it all, WaFd Bank is built for business. After over 100 years, we know what it takes to help you succeed, from start to legacy. Visit your local branch or give us a call at 800-324-9375 to experience the difference WaFd Bank can make for you.
WaFd Bank is an SBA Preferred Lender in all nine Western states we serve including Washington, Oregon, Idaho, Nevada, New Mexico, Texas, California, Utah, and Arizona.
Frequently Asked Questions
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Content is provided for general informational purposes only and does not constitute legal, tax, financial, or business advice. Consult a qualified legal professional or specialist regarding your specific needs and circumstances.
