Kaufman & Forman, P.C.
Call to arrange a consultation
678-957-7769 | 770-390-9200
Contact Us
practice areas

Where can those looking to start a small business go for help? -- II

Last week, our blog started discussing how budding entrepreneurs eager to get their business off the ground or operating at the next level, but who remain stymied by insufficient capital may consider securing financing from the U.S. Small Business Administration.

To recap, the SBA -- a federal agency designed to help "Americans start, build and grow businesses" -- runs the extremely popular 7(a) loan program, which is designed to subsidize a variety of business objectives.  

What are some of the business objectives for which 7(a) loan proceeds can be used?

While 7(a) loan proceeds can be used to cover everything from purchasing inventory to covering operational expenses, it's important to understand they can also be used for perhaps less mundane purposes.

Indeed, entrepreneurs can use 7(a) loan proceeds to cover just some of the following:

  • The costs associated with acquiring, expanding or operating an existing business
  • The costs of materials, supplies, furniture, fixtures, equipment and machinery
  • The costs of renovating existing facilities
  • The costs of constructing new facilities
  • The costs of acquiring real estate

What are some business objectives for which 7(a) loan proceeds can't be used?

Even though the possibilities for 7(a) loan proceeds seem endless, it's very important to understand that the SBA has established a list of purposes for which these funds cannot be used under any circumstances.

Some of these include:

  • Repayment of delinquent tax debt at either the state or federal level
  • Refinancing of an outstanding debt where the original lender is poised to take a loss and the refinancing would result in the SBA assuming this risk of loss
  • Pursuit of a change that will not serve to benefit the business in any capacity
  • Objectives found by the SBA to be lacking a strong business purpose

We will continue examining this topic in future posts.

If you are an entrepreneur requiring assistance with a business formation matter -- entity selection, employee contracts, regulatory compliance, etc. -- please consider consulting with a skilled legal professional who can provide the necessary guidance.

No Comments

Leave a comment
Comment Information

Contact Kaufman & Forman, P.C. Now

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

get Legal Help Now

Kaufman & Forman, P.C.
8215 Roswell Road
Building 800
Atlanta, GA 30350

Toll Free: 800-461-5864
Phone: 678-957-7769
Fax: 770-395-6720
Atlanta Law Office Map

Review Us

Robert Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the May issue of The American Lawyer & Corporate Counsel magazine.Alex Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the December issue of The American Lawyer & Corporate Counsel magazine.

*AV Preeminent and BV Distinguished are certification marks of Reed Elsevier Properties Inc., used in accordance with the Martindale-Hubbell certification procedures, standards and policies. Martindale-Hubbell is the facilitator of a peer review rating process. Ratings reflect the confidential opinions of members of the bar and the judiciary. Martindale-Hubbell ratings fall into two categories: legal ability and general ethical standards.