According to the SBA, the following are ineligible for 7(a) loan assistance -

• Non-profit businesses (for-profit subsidiaries are eligible);

• Financial businesses primarily engaged in the business of lending, such as banks, finance companies, and factors (pawn shops, although engaged in lending, may qualify in some circumstances);

• Passive businesses owned by developers and landlords that do not actively use or occupy the assets acquired or improved with the loan proceeds (except Eligible Passive Companies under § 120.111);

• Life insurance companies;

• Businesses located in a foreign country (businesses in the U.S. owned by aliens may qualify);

• Pyramid sale distribution plans;

• Businesses deriving more than one-third of gross annual revenue from legal gambling activities;

• Businesses engaged in any activity that is illegal under Federal, State, or local law;

• Private clubs and businesses which limit the number of memberships for reasons other than capacity;

• Government-owned entities (except for businesses owned or controlled by a Native American tribe);

• Loan packagers earning more than one third of their gross annual revenue from packaging SBA loans;

• Businesses with an Associate who is incarcerated, on probation, on parole, or is under indictment for a felony or any crime involving or relating to financial misconduct or a false statement;

• Businesses in which the Lender or CDC, or any of its Associates owns an equity interest;

• Businesses which:

  • Present live performances of a prurient sexual nature; or

  • Derive directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature;

• Unless waived by SBA for good cause, businesses that have previously defaulted on a Federal loan or Federally assisted financing, resulting in the Federal government or any of its agencies or Departments sustaining a loss in any of its programs, and businesses owned or controlled by an applicant or any of its Associates which previously owned, operated, or controlled a business which defaulted on a Federal loan (or guaranteed a loan which was defaulted) and caused the Federal government or any of its agencies or Departments to sustain a loss in any of its programs. For purposes of this section, a compromise agreement shall also be considered a loss;

• Businesses primarily engaged in political or lobbying activities; and

• Speculative businesses (such as oil wildcatting).
  

Link to the official publication: https://www.govinfo.gov/link/cfr/13/120?link-type=pdf&sectionnum=110&year=mostrecent