{"ok":true,"canonical_url":"https://dealroom.so/glossary/principal-and-interest","api_url":"https://dealroom.so/api/public/glossary/principal-and-interest","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":"principal-and-interest","term":"Principal and interest","group":"The loan itself","definition":"These are the two main components of your loan payments. Principal reduces the loan balance, while interest is the cost of borrowing.","what_it_means":"Each month, your SBA loan payment consists of a portion that pays down the principal balance and a portion that covers the interest accrued. Early in the loan term, more of your payment goes towards interest. Understanding this breakdown helps you project future debt service costs and cash flow.","url":"https://dealroom.so/glossary/principal-and-interest","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":"amortization","term":"Amortization","url":"https://dealroom.so/glossary/amortization"},{"slug":"debt-service","term":"Debt service","url":"https://dealroom.so/glossary/debt-service"},{"slug":"variable-rate","term":"Variable rate","url":"https://dealroom.so/glossary/variable-rate"},{"slug":"term-maturity","term":"Term / maturity","url":"https://dealroom.so/glossary/term-maturity"}],"related_questions":[{"question":"Can a 7(a) lender approve a deferment of principal and interest payments without prior SBA approval?","url":"https://dealroom.so/for-lenders/questions/can-a-7-a-lender-approve-a-deferment-of-principal-and-interest-payments-without-prior-sba-"},{"question":"What specific conditions allow a seller note with deferred principal payments but immediate interest to qualify as full standby?","url":"https://dealroom.so/for-lenders/questions/what-specific-conditions-allow-a-seller-note-with-deferred-principal-payments-but-immediat"},{"question":"If a seller note has deferred principal payments but pays interest from day one, does it qualify as full standby?","url":"https://dealroom.so/sba-7a/questions/if-a-seller-note-has-deferred-principal-payments-but-pays-interest-from-day-one-does-it-qu"},{"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":"If a seller provides a note for $100,000, can they receive principal or interest payments from the business during the SBA loan term?","url":"https://dealroom.so/sba-7a/questions/if-a-seller-provides-a-note-for-100-000-can-they-receive-principal-or-interest-payments-fr"},{"question":"What is the difference between a fixed interest rate and a variable interest rate on an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-is-the-difference-between-a-fixed-interest-rate-and-a-variable-interest-rate-on-an-sb"}]},"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 — Principal and interest","url":"https://dealroom.so/glossary/principal-and-interest","source_type":"DealRoom Data"}}