{"ok":true,"canonical_url":"https://dealroom.so/glossary/interest-only-payment","api_url":"https://dealroom.so/api/public/glossary/interest-only-payment","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":"interest-only-payment","term":"Interest-Only Payment","group":"The loan itself","definition":"This is a loan payment where you only pay the interest owed, not any principal. It lowers your monthly payments temporarily but doesn't reduce your loan balance.","what_it_means":"Some SBA loans offer an initial period of interest-only payments, usually at the start of the loan. This can help with cash flow during the transition or ramp-up phase of your new business. Understand the total impact on your loan amortization and overall cost.","url":"https://dealroom.so/glossary/interest-only-payment","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"}],"related":[{"slug":"deferred-principal-payment","term":"Deferred Principal Payment","url":"https://dealroom.so/glossary/deferred-principal-payment"},{"slug":"deferment-period","term":"Deferment Period","url":"https://dealroom.so/glossary/deferment-period"},{"slug":"amortization","term":"Amortization","url":"https://dealroom.so/glossary/amortization"},{"slug":"principal-and-interest","term":"Principal and interest","url":"https://dealroom.so/glossary/principal-and-interest"}],"related_questions":[{"question":"Under what specific circumstances can a lender approve an interest-only payment period for a 7(a) loan without prior SBA approval?","url":"https://dealroom.so/for-lenders/questions/under-what-specific-circumstances-can-a-lender-approve-an-interest-only-payment-period-for"},{"question":"Can an SBA 7(a) loan be approved if the seller's note allows interest-only payments for the first year?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-approved-if-the-seller-s-note-allows-interest-only-payments-for-the"},{"question":"Can I use a seller note that pays interest only for the first two years towards my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-a-seller-note-that-pays-interest-only-for-the-first-two-years-towards-my-equity-"},{"question":"What happens if the seller's note is only partially on standby, with some payments allowed?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-the-seller-s-note-is-only-partially-on-standby-with-some-payments-allowed"},{"question":"If a seller note is structured with deferred principal payments but immediate interest payments, does it still qualify as full standby?","url":"https://dealroom.so/sba-7a/questions/if-a-seller-note-is-structured-with-deferred-principal-payments-but-immediate-interest-pay"},{"question":"Can a partial standby seller note include a provision for interest payments during the standby period?","url":"https://dealroom.so/for-lenders/questions/can-a-partial-standby-seller-note-include-a-provision-for-interest-payments-during-the-sta"}]},"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 — Interest-Only Payment","url":"https://dealroom.so/glossary/interest-only-payment","source_type":"DealRoom Data"}}