{"ok":true,"canonical_url":"https://dealroom.so/glossary/interest-only-payments","api_url":"https://dealroom.so/api/public/glossary/interest-only-payments","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-payments","term":"Interest-Only Payments","group":"The loan itself","definition":"This is a period where your loan payments cover only the interest, not the principal. It can provide a temporary cash flow boost early in your business ownership.","what_it_means":"The SBA 7(a) program allows for an initial interest-only period, typically up to 24 months, on certain loans. This can be beneficial for businesses needing to build working capital or manage early operational costs post-acquisition. Discuss with your lender if this option is available and makes sense for your cash flow projections.","url":"https://dealroom.so/glossary/interest-only-payments","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":"interest-only-payment","term":"Interest-Only Payment","url":"https://dealroom.so/glossary/interest-only-payment"},{"slug":"deferred-principal-payment","term":"Deferred Principal Payment","url":"https://dealroom.so/glossary/deferred-principal-payment"},{"slug":"principal-and-interest","term":"Principal and interest","url":"https://dealroom.so/glossary/principal-and-interest"},{"slug":"amortization","term":"Amortization","url":"https://dealroom.so/glossary/amortization"}],"related_questions":[{"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":"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"},{"question":"Can the seller receive interest payments on a fully subordinated seller note during the SBA loan term?","url":"https://dealroom.so/sba-7a/questions/can-the-seller-receive-interest-payments-on-a-fully-subordinated-seller-note-during-the-sb"},{"question":"Can a seller note with deferred payments but no interest count as full standby for equity injection?","url":"https://dealroom.so/for-lenders/questions/can-a-seller-note-with-deferred-payments-but-no-interest-count-as-full-standby-for-equity-"}]},"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 Payments","url":"https://dealroom.so/glossary/interest-only-payments","source_type":"DealRoom Data"}}