Glossary
Use of proceeds
What the money is allowed to pay for. Working capital, equipment, inventory, owner-occupied real estate, business acquisition and certain debt refinancing all qualify.
Why it matters to you
What it can't do matters more: you can't take a distribution, can't buy out a partner's personal debt, can't fund passive real estate investment. Everything gets disbursed against documentation, so plan for money arriving in tranches rather than as a lump sum.