13 CFR §120.120

1. (a)A Borrower may use loan proceeds from any SBA loan to:
   1. (1)Acquire land (by purchase or lease);
   2. (2)Improve a site (e.g., grading, streets, parking lots, landscaping), including up to 5 percent for community improvements such as curbs and sidewalks;
   3. (3)Purchase one or more existing buildings;
   4. (4)Convert, expand or renovate one or more existing buildings;
   5. (5)Construct one or more new buildings; and/or
   6. (6)Acquire (by purchase or lease) and install fixed assets (for a 504 loan, these assets must have a useful life of at least 10 years and be at a fixed location, although short-term financing for equipment, furniture, and furnishings may be permitted where essential to and a minor portion of the 504 Project).
2. (b)A Borrower may also use 7(a) and microloan proceeds for:
   1. (1)Inventory;
   2. (2)Supplies;
   3. (3)Raw materials; and
   4. (4)Working capital (if the Operating Company is a co-borrower with the Eligible Passive Company, part of the loan proceeds may be applied for working capital and/or the purchase of other assets, including intangible assets, for use by the Operating Company).
3. (c)A Borrower may use 7(a) loan proceeds for refinancing certain outstanding debts.