SBA rules · SOP 50 10 8.1

Can an SBA loan finance a pawn shop?

Yes, an SBA loan can finance a pawn shop, provided more than 50 percent of its prior year revenue came from merchandise sales rather than interest on loans.

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

In detail

Merchandise sales threshold: A pawn shop qualifies for financing only if more than 50 percent of its prior year revenue is derived from merchandise sales rather than interest on loans.
General lending prohibition: SBA loans generally cannot provide funds to businesses primarily engaged in lending or whose stock in trade is money, making the merchandise sales rule a limited exception.

The source

What the SOP says

“A pawn shop is eligible if more than 50 percent of prior year revenue is from merchandise sales rather than interest on loans.

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > Certain businesses engaged in lending may be eligible under limited circumstances: (lines 400-405)✓ Verified

“SBA cannot guarantee a loan that provides funds to businesses primarily engaged in lending, investment, or to an otherwise eligible business engaged in financing, factoring, or investment not related or essential to the business.

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > Types of Ineligible Businesses (lines 388-399)✓ Verified

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