{"ok":true,"canonical_url":"https://dealroom.so/glossary/cash-out-refinance","api_url":"https://dealroom.so/api/public/glossary/cash-out-refinance","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":"cash-out-refinance","term":"Cash-out refinance","group":"The loan itself","definition":"This is when you refinance an existing loan for a larger amount than currently owed, taking the difference in cash. It's often used with home equity but is generally not permitted with SBA 7(a) business acquisition loans.","what_it_means":"You cannot use an SBA 7(a) acquisition loan to \"cash out\" equity from the business itself or from collateral you're bringing into the deal. The loan proceeds must be directly applied to the approved uses for the acquisition. Any equity injection must be \"seasoned funds\" and not round-tripped from the loan.","url":"https://dealroom.so/glossary/cash-out-refinance","official_sources":[{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"},{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"refinancing","term":"Refinancing","url":"https://dealroom.so/glossary/refinancing"},{"slug":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"slug":"round-tripped","term":"Round-tripped","url":"https://dealroom.so/glossary/round-tripped"},{"slug":"use-of-proceeds","term":"Use of proceeds","url":"https://dealroom.so/glossary/use-of-proceeds"}],"related_questions":[{"question":"Can a cash-out refinance of my personal home count as equity injection for an acquisition?","url":"https://dealroom.so/sba-7a/questions/can-a-cash-out-refinance-of-my-personal-home-count-as-equity-injection-for-an-acquisition"},{"question":"Can a borrower use a cash-out refinance from personal real estate for the equity injection?","url":"https://dealroom.so/for-lenders/questions/can-a-borrower-use-a-cash-out-refinance-from-personal-real-estate-for-the-equity-injection"},{"question":"Can funds from a cash-out refinance of my investment property count towards my SBA 7(a) down payment?","url":"https://dealroom.so/sba-7a/questions/can-funds-from-a-cash-out-refinance-of-my-investment-property-count-towards-my-sba-7-a-dow"},{"question":"Can cash-out loan proceeds go to the remaining owner in a buyout?","url":"https://dealroom.so/sba-7a/questions/can-cash-out-loan-proceeds-go-to-the-remaining-owner-in-a-buyout"},{"question":"Are there specific restrictions on the maximum amount of cash-out allowed to the seller in an SBA 7(a) acquisition?","url":"https://dealroom.so/sba-7a/questions/are-there-specific-restrictions-on-the-maximum-amount-of-cash-out-allowed-to-the-seller-in"},{"question":"If I am buying out a partner, does the SBA require the business to pass a cash flow test post-acquisition?","url":"https://dealroom.so/sba-7a/questions/if-i-am-buying-out-a-partner-does-the-sba-require-the-business-to-pass-a-cash-flow-test-po"}]},"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 — Cash-out refinance","url":"https://dealroom.so/glossary/cash-out-refinance","source_type":"DealRoom Data"}}