{"ok":true,"canonical_url":"https://dealroom.so/glossary/conventional-lending-practices","api_url":"https://dealroom.so/api/public/glossary/conventional-lending-practices","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":"conventional-lending-practices","term":"Conventional Lending Practices","group":"The loan itself","definition":"The standard loan underwriting and approval criteria used by banks for loans not backed by government guarantees. SBA loans often bridge gaps where conventional financing isn't available.","what_it_means":"The SBA requires lenders to follow prudent conventional lending practices even for guaranteed loans. This means the loan must be structured soundly, with proper collateral and repayment analysis, even if the SBA provides a guaranty. The \"credit elsewhere test\" ensures you can't get a conventional loan first.","url":"https://dealroom.so/glossary/conventional-lending-practices","official_sources":[{"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"},{"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"}],"related":[{"slug":"credit-elsewhere-test","term":"Credit elsewhere test","url":"https://dealroom.so/glossary/credit-elsewhere-test"},{"slug":"prudent-lending-standards","term":"Prudent lending standards","url":"https://dealroom.so/glossary/prudent-lending-standards"},{"slug":"underwriting","term":"Underwriting","url":"https://dealroom.so/glossary/underwriting"},{"slug":"credit-analysis","term":"Credit analysis","url":"https://dealroom.so/glossary/credit-analysis"}],"related_questions":[{"question":"How do SBA loan rates compare to conventional bank loan rates for business acquisitions?","url":"https://dealroom.so/sba-7a/questions/how-do-sba-loan-rates-compare-to-conventional-bank-loan-rates-for-business-acquisitions"},{"question":"What makes an SBA 7(a) loan more attractive than a conventional bank loan?","url":"https://dealroom.so/sba-loans/basics/what-makes-an-sba-7-a-loan-more-attractive-than-a-conventional-bank-loan"},{"question":"Are SBA 7(a) loan interest rates typically higher or lower than conventional bank loans?","url":"https://dealroom.so/sba-loans/basics/are-sba-7-a-loan-interest-rates-typically-higher-or-lower-than-conventional-bank-loans"},{"question":"What key advantages does an SBA 7(a) loan offer over a conventional bank loan?","url":"https://dealroom.so/sba-loans/basics/what-key-advantages-does-an-sba-7-a-loan-offer-over-a-conventional-bank-loan"},{"question":"What are the primary distinctions between an SBA 7(a) loan and a conventional bank loan?","url":"https://dealroom.so/sba-loans/basics/what-are-the-primary-distinctions-between-an-sba-7-a-loan-and-a-conventional-bank-loan"},{"question":"Are there any disadvantages to getting an SBA 7(a) loan compared to a conventional loan?","url":"https://dealroom.so/sba-loans/basics/are-there-any-disadvantages-to-getting-an-sba-7-a-loan-compared-to-a-conventional-loan"}]},"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 — Conventional Lending Practices","url":"https://dealroom.so/glossary/conventional-lending-practices","source_type":"DealRoom Data"}}