{"ok":true,"canonical_url":"https://dealroom.so/glossary/prepayment","api_url":"https://dealroom.so/api/public/glossary/prepayment","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":"prepayment","term":"Prepayment","group":"The loan itself","definition":"Prepayment means paying off your loan earlier than scheduled. While it sounds good, SBA 7(a) loans often have a prepayment penalty for early repayment in the first few years.","what_it_means":"Be aware of any prepayment penalties in your SBA 7(a) loan agreement. These penalties usually apply if you pay off a substantial portion of the loan within the first three years. Factor this into your financial planning if you anticipate a quick resale or early debt repayment from excess cash flow.","url":"https://dealroom.so/glossary/prepayment","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":"prepayment-penalty","term":"Prepayment penalty","url":"https://dealroom.so/glossary/prepayment-penalty"},{"slug":"loan-agreement","term":"Loan agreement","url":"https://dealroom.so/glossary/loan-agreement"},{"slug":"amortization","term":"Amortization","url":"https://dealroom.so/glossary/amortization"},{"slug":"term-maturity","term":"Term / maturity","url":"https://dealroom.so/glossary/term-maturity"}],"related_questions":[{"question":"Are there prepayment penalties on an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/are-there-prepayment-penalties-on-an-sba-7-a-loan"},{"question":"When exactly do prepayment penalties apply to an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/when-exactly-do-prepayment-penalties-apply-to-an-sba-7-a-loan"},{"question":"What triggers the application of the SBA 7(a) loan prepayment penalty?","url":"https://dealroom.so/for-lenders/questions/what-triggers-the-application-of-the-sba-7-a-loan-prepayment-penalty"},{"question":"Are there specific loan sizes for which the prepayment penalty does not apply?","url":"https://dealroom.so/sba-7a/questions/are-there-specific-loan-sizes-for-which-the-prepayment-penalty-does-not-apply"},{"question":"Are there any prepayment penalties if I repay my SBA 7(a) loan early?","url":"https://dealroom.so/sba-loans/basics/are-there-any-prepayment-penalties-if-i-repay-my-sba-7-a-loan-early"},{"question":"Are there prepayment penalties if I pay off my SBA 7(a) loan early?","url":"https://dealroom.so/sba-7a/questions/are-there-prepayment-penalties-if-i-pay-off-my-sba-7-a-loan-early"}]},"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 — Prepayment","url":"https://dealroom.so/glossary/prepayment","source_type":"DealRoom Data"}}