{"ok":true,"canonical_url":"https://dealroom.so/glossary/assumption-of-debt","api_url":"https://dealroom.so/api/public/glossary/assumption-of-debt","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"assumption-of-debt","term":"Assumption of debt","group":"Doing the deal","definition":"This is when you, the buyer, take over an existing debt obligation from the seller. It means you become responsible for paying off that specific loan or liability going forward.","what_it_means":"While common in some M&A, SBA 7(a) loans generally fund new business debt, not the assumption of the seller's existing business loans. If the seller has debt you want to keep, it's typically restructured or paid off at closing with the new loan proceeds, not assumed by you as part of the 7(a) financing.","url":"https://dealroom.so/glossary/assumption-of-debt","official_sources":[],"related":[{"slug":"seller-note","term":"Seller note","url":"https://dealroom.so/glossary/seller-note"},{"slug":"subordinated-debt","term":"Subordinated Debt","url":"https://dealroom.so/glossary/subordinated-debt"},{"slug":"loi","term":"LOI","url":"https://dealroom.so/glossary/loi"}],"related_questions":[{"question":"Can a buyer's assumption of existing business debt count as part of the equity injection?","url":"https://dealroom.so/sba-7a/questions/can-a-buyer-s-assumption-of-existing-business-debt-count-as-part-of-the-equity-injection"},{"question":"Can I use an SBA 7(a) loan for debt consolidation of existing business debts?","url":"https://dealroom.so/sba-loans/basics/can-i-use-an-sba-7-a-loan-for-debt-consolidation-of-existing-business-debts"},{"question":"What if the seller holds a significant portion of the acquired business's debt?","url":"https://dealroom.so/sba-7a/questions/what-if-the-seller-holds-a-significant-portion-of-the-acquired-business-s-debt"},{"question":"Does having a high amount of personal student loan debt affect SBA 7(a) loan approval?","url":"https://dealroom.so/sba-7a/questions/does-having-a-high-amount-of-personal-student-loan-debt-affect-sba-7-a-loan-approval"},{"question":"How does a lender verify the full standby status of a non-SBA third-party debt?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-verify-the-full-standby-status-of-a-non-sba-third-party-debt"},{"question":"What level of debt service coverage ratio (DSCR) does an SBA 7(a) lender typically look for?","url":"https://dealroom.so/sba-7a/questions/what-level-of-debt-service-coverage-ratio-dscr-does-an-sba-7-a-lender-typically-look-for"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Assumption of debt","url":"https://dealroom.so/glossary/assumption-of-debt","source_type":"DealRoom Data"}}