SBA rules · SOP 50 10 8.1

Can an SBA loan finance a medical, dental or law practice?

Yes, an SBA 7(a) or 504 loan can finance a medical, dental, or law practice, provided the business operates for profit and its ownership structure meets all applicable state licensing requirements.

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

In detail

Professional licensing: Businesses offering services that require professional licenses to operate are eligible as long as the ownership structure satisfies all applicable state requirements in which they are located.
Lender documentation: The lender must document the eligibility of the business and its ownership structure under state law in the loan file.
For-profit requirement: All applicants must be organized for profit, meaning non-profit practices or clinics are ineligible for SBA assistance.
Proof of licensure: For 7(a) loans, the lender must obtain evidence from the borrower of all licenses required to operate the business within no more than 90 days after final disbursement.
504 special purpose facilities: Under the 504 program, specialized medical real estate such as hospitals, surgery centers, and urgent care centers is classified as limited or special purpose property, which requires an increased borrower equity contribution.

The source

What the SOP says

“Businesses that offer services which require professional licenses to operate are eligible, provided that the ownership structure meets all applicable state requirements in which they are located.

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > Note (lines 423-431)✓ Verified

“The Lender must document the eligibility of the business and ownership structure, per state requirements, in the loan file (e.g., medspas).

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > Note (lines 423-431)✓ Verified

“All Applicants must be organized for profit. Non-profit businesses are not eligible for SBA business loan assistance.

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > Organized for Profit (lines 329-340)✓ Verified

“The Lender must obtain evidence from the Borrower of all licenses required to operate the business within no more than 90 days after final disbursement of the loan.

SOP 50 10 8.1, Chapter 6: SBA Terms and Conditions through Disbursement for all 7(a) Loans > Licenses: (lines 3001-3002)✓ Verified

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