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SBA rules · SOP 50 10 8.1

Can an SBA loan finance land leased for a cell tower or billboard?

No, an SBA loan cannot finance land leased to a third party for a cell tower or billboard because businesses that lease land for such installations are ineligible passive businesses.

Quoted from SBA SOP 50 10 8.1Every quote checked word for word

In detail

  • Passive business ineligibility: Businesses that lease land for the installation of a cell phone tower, solar panels, billboards, or wind turbine are not eligible for SBA assistance.
  • Operating entity distinction: While leasing the land is ineligible, the business operating the cell phone tower, solar panel, billboard, or wind turbine is eligible.
  • Use of proceeds restriction: SBA loan proceeds cannot be used for investments in real or personal property acquired and held primarily for future development, sale, lease, or investment.
  • Complete exclusion: An ineligible business cannot obtain an SBA loan for any purpose, including the purchase or construction of a building for its own use.

The source

What the SOP says

“Businesses that lease land for the installation of a cell phone tower, solar panels, billboards, or wind turbine also are not eligible. However, the business operating the cell phone tower, solar panel, billboard, or wind turbine is eligible.
SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > Passive Businesses 13 CFR § 120.110(c): (lines 406-418)✓ Verified
“An ineligible business cannot obtain an SBA Loan for any purpose, including the purchase or construction of a building for its own use.
SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > Note (lines 432-434)✓ Verified
“Investments in real or personal property acquired and held primarily for future development, sale, lease, or investment (except for a loan to an Eligible Passive Company or to a small contractor under the Builders CAPLine program).
SOP 50 10 8.1, Chapter 3: Uses of Proceeds > 13 CFR § 120.130 (lines 803-817)✓ Verified

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This page quotes the SBA's Standard Operating Procedure 50 10 8.1. Lenders can ask for more than the SBA minimum. It is general information, not a loan approval or legal advice.