{"ok":true,"canonical_url":"https://dealroom.so/glossary/conventional-loan","api_url":"https://dealroom.so/api/public/glossary/conventional-loan","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-loan","term":"Conventional loan","group":"The loan itself","definition":"A traditional bank loan not backed by a government agency like the SBA. Buyers care because if you qualify for a conventional loan, you likely won't be eligible for an SBA loan due to the 'credit elsewhere test'.","what_it_means":"Lenders will first evaluate if your deal can be financed conventionally without an SBA guarantee. If not, they'll turn to an SBA 7(a) loan. As a buyer, be prepared to demonstrate why conventional financing isn't feasible for your specific business acquisition, which is a key part of SBA underwriting.","url":"https://dealroom.so/glossary/conventional-loan","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":"7a-loan","term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"},{"slug":"credit-elsewhere-test","term":"Credit elsewhere test","url":"https://dealroom.so/glossary/credit-elsewhere-test"},{"slug":"underwriting","term":"Underwriting","url":"https://dealroom.so/glossary/underwriting"},{"slug":"prudent-lending-standards","term":"Prudent lending standards","url":"https://dealroom.so/glossary/prudent-lending-standards"}],"related_questions":[{"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":"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":"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 loan","url":"https://dealroom.so/glossary/conventional-loan","source_type":"DealRoom Data"}}