{"ok":true,"canonical_url":"https://dealroom.so/glossary/loc-agreement","api_url":"https://dealroom.so/api/public/glossary/loc-agreement","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":"loc-agreement","term":"LOC Agreement","aka":"Line of Credit Agreement","group":"The loan itself","definition":"This is a contract outlining the terms and conditions for a line of credit, allowing a business to draw funds up to a maximum amount, repay them, and redraw again. It's for working capital, not acquisition.","what_it_means":"While an SBA 7(a) loan can include a working capital component, it's typically a term loan for the acquisition itself. An LOC Agreement is a separate instrument, usually for ongoing operational needs or seasonal fluctuations. Ensure you understand the distinction and how any working capital is structured.","url":"https://dealroom.so/glossary/loc-agreement","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":"line-of-credit","term":"Line of credit","url":"https://dealroom.so/glossary/line-of-credit"},{"slug":"working-capital","term":"Working capital","url":"https://dealroom.so/glossary/working-capital"},{"slug":"sba-express","term":"SBA Express","url":"https://dealroom.so/glossary/sba-express"},{"slug":"use-of-proceeds","term":"Use of proceeds","url":"https://dealroom.so/glossary/use-of-proceeds"}],"related_questions":[{"question":"How does life insurance effectively fund a business buy-sell agreement?","url":"https://dealroom.so/sba-7a/questions/how-does-life-insurance-effectively-fund-a-business-buy-sell-agreement"},{"question":"How does the purchase agreement structure affect an SBA partner buyout?","url":"https://dealroom.so/sba-7a/questions/how-does-the-purchase-agreement-structure-affect-an-sba-partner-buyout"},{"question":"How does an operating agreement impact an SBA partner buyout loan?","url":"https://dealroom.so/sba-7a/questions/how-does-an-operating-agreement-impact-an-sba-partner-buyout-loan"},{"question":"What happens if the seller terminates the purchase agreement mid-process?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-the-seller-terminates-the-purchase-agreement-mid-process"},{"question":"What are the specific conditions for an acceptable full standby agreement?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-conditions-for-an-acceptable-full-standby-agreement"},{"question":"What if a franchise agreement contains provisions for indemnification that concern the SBA?","url":"https://dealroom.so/for-lenders/questions/what-if-a-franchise-agreement-contains-provisions-for-indemnification-that-concern-the-sba"}]},"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 — LOC Agreement","url":"https://dealroom.so/glossary/loc-agreement","source_type":"DealRoom Data"}}