Can an SBA loan be used for payroll? What about to support cash flow? To refinance debt?
Here’s a breakdown of how you can use the working capital from an SBA 7(a) loan.
What is Working Capital?
When “working capital” is referred to in the context of use cases for an SBA loan, here is what that encompasses:
- Rent and utilities
- Payroll and benefits
- Insurance premiums
- Professional service fees
- Permits and licenses related to your loan project
- Other recurring operating costs
All of these are allowable uses of SBA 7(a) loans.
What’s Not Considered “Working Capital” by the SBA?
- Equipment
- Real estate
- Investment
What About Refinancing?
You can refinance many business-related debts, such as certain types of business term loans and lines of credit.
Here is a full breakdown of refinancing business debt through NEWITY.
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