{"ok":true,"canonical_url":"https://dealroom.so/glossary/demand-letter","api_url":"https://dealroom.so/api/public/glossary/demand-letter","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":"demand-letter","term":"Demand Letter","group":"The loan itself","definition":"A formal letter from a lender to a borrower, stating that a loan is in default and demanding immediate repayment of the entire outstanding balance. This is a serious step, typically preceding Foreclosure or other legal action.","what_it_means":"If your business defaults on its 7(a) loan, the lender will send a Demand Letter, officially notifying you of the Loan default and calling the entire loan due. Failure to respond or pay will lead to the lender pursuing Collateral and potentially initiating a UCC Foreclosure Process. This is a red flag you never want to receive.","url":"https://dealroom.so/glossary/demand-letter","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":"loan-default","term":"Loan default","url":"https://dealroom.so/glossary/loan-default"},{"slug":"foreclosure","term":"Foreclosure","url":"https://dealroom.so/glossary/foreclosure"},{"slug":"ucc-foreclosure-process","term":"UCC Foreclosure Process","url":"https://dealroom.so/glossary/ucc-foreclosure-process"},{"slug":"call-of-the-guaranty","term":"Call of the guaranty","url":"https://dealroom.so/glossary/call-of-the-guaranty"}],"related_questions":[{"question":"Does a gift letter need to be from a U.S. citizen or permanent resident for equity injection?","url":"https://dealroom.so/sba-7a/questions/does-a-gift-letter-need-to-be-from-a-u-s-citizen-or-permanent-resident-for-equity-injectio"},{"question":"Are there specific requirements for a gift letter if funds are received from multiple immediate family members for the down payment?","url":"https://dealroom.so/sba-7a/questions/are-there-specific-requirements-for-a-gift-letter-if-funds-are-received-from-multiple-imme"}]},"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 — Demand Letter","url":"https://dealroom.so/glossary/demand-letter","source_type":"DealRoom Data"}}