{"ok":true,"canonical_url":"https://dealroom.so/glossary/seller-note-on-standby","api_url":"https://dealroom.so/api/public/glossary/seller-note-on-standby","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":"seller-note-on-standby","term":"Seller note on standby","group":"Your money in the deal","definition":"This is a portion of the seller financing that is not paid back until the SBA loan is fully repaid, or only paid back with strict limitations. It's often required by the SBA to count towards your equity injection.","what_it_means":"For an SBA 7(a) loan, any seller note used to bridge the gap between your cash injection and the loan amount must typically be on \"full standby\" for the life of the loan. This means no principal or interest payments are made on it until the SBA loan is paid off, making it function like equity in the eyes of the SBA. A \"partial standby\" might allow interest-only payments.","url":"https://dealroom.so/glossary/seller-note-on-standby","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":"seller-note","term":"Seller note","url":"https://dealroom.so/glossary/seller-note"},{"slug":"standby","term":"Standby","url":"https://dealroom.so/glossary/standby"},{"slug":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"slug":"full-standby-agreement","term":"Full Standby Agreement","url":"https://dealroom.so/glossary/full-standby-agreement"}],"related_questions":[{"question":"Can a seller note be partially on standby and partially paid out?","url":"https://dealroom.so/sba-7a/questions/can-a-seller-note-be-partially-on-standby-and-partially-paid-out"},{"question":"What is a standby seller note on an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/what-is-a-standby-seller-note-on-an-sba-7-a-loan"},{"question":"If a seller note is on full standby, when can the seller start receiving principal payments?","url":"https://dealroom.so/sba-7a/questions/if-a-seller-note-is-on-full-standby-when-can-the-seller-start-receiving-principal-payments"},{"question":"Can a seller note on full standby accrue interest during the standby period, even if not paid?","url":"https://dealroom.so/sba-7a/questions/can-a-seller-note-on-full-standby-accrue-interest-during-the-standby-period-even-if-not-pa"},{"question":"Can a seller note on partial standby count towards the required equity injection?","url":"https://dealroom.so/sba-7a/questions/can-a-seller-note-on-partial-standby-count-towards-the-required-equity-injection"},{"question":"Under what conditions can a seller note on full standby be repaid early?","url":"https://dealroom.so/sba-7a/questions/under-what-conditions-can-a-seller-note-on-full-standby-be-repaid-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 — Seller note on standby","url":"https://dealroom.so/glossary/seller-note-on-standby","source_type":"DealRoom Data"}}