{"ok":true,"canonical_url":"https://dealroom.so/glossary/prepayment-event","api_url":"https://dealroom.so/api/public/glossary/prepayment-event","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-event","term":"Prepayment Event","aka":"Prepayment penalty","group":"The loan itself","definition":"This occurs when you pay off your SBA 7(a) loan early. Depending on the loan terms and timing, it might trigger a prepayment penalty.","what_it_means":"If your loan has a term of 15 years or more and you prepay more than 25% of the outstanding principal balance within the first three years, the SBA requires a prepayment penalty. Understand these terms; they could impact future refinancing or sale plans.","url":"https://dealroom.so/glossary/prepayment-event","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":"term-maturity","term":"Term / maturity","url":"https://dealroom.so/glossary/term-maturity"},{"slug":"refinancing","term":"Refinancing","url":"https://dealroom.so/glossary/refinancing"}],"related_questions":[{"question":"What happens if a significant post-closing event impacts the borrower's ability to repay an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-a-significant-post-closing-event-impacts-the-borrower-s-ability-to-repay-a"},{"question":"How does a lender assess the impact of a significant post-closing event on the borrower's ability to repay a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-assess-the-impact-of-a-significant-post-closing-event-on-the-borrower-s-"},{"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"}]},"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 Event","url":"https://dealroom.so/glossary/prepayment-event","source_type":"DealRoom Data"}}