{"ok":true,"canonical_url":"https://dealroom.so/glossary/seller-standby-agreement","api_url":"https://dealroom.so/api/public/glossary/seller-standby-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":"seller-standby-agreement","term":"Seller standby agreement","aka":"Standby agreement","group":"Your money in the deal","definition":"A formal agreement where the seller agrees to defer repayment of any seller debt until the SBA loan is fully satisfied. This ensures the SBA lender is prioritized for repayment.","what_it_means":"This agreement is mandatory for any seller debt included in an SBA 7(a) deal. It prevents the seller from competing with the SBA lender for repayments, which improves the business's debt service coverage. Ensure your LOI outlines the seller note's terms and standby status.","url":"https://dealroom.so/glossary/seller-standby-agreement","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"},{"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"}],"related":[{"slug":"seller-debt","term":"Seller debt","url":"https://dealroom.so/glossary/seller-debt"},{"slug":"full-standby-agreement","term":"Full Standby Agreement","url":"https://dealroom.so/glossary/full-standby-agreement"},{"slug":"standby","term":"Standby","url":"https://dealroom.so/glossary/standby"},{"slug":"loi","term":"LOI","url":"https://dealroom.so/glossary/loi"}],"related_questions":[{"question":"Can a seller's post-closing consulting agreement influence the standby status of their seller note?","url":"https://dealroom.so/sba-7a/questions/can-a-seller-s-post-closing-consulting-agreement-influence-the-standby-status-of-their-sel"},{"question":"Can the seller's post-closing consulting agreement influence the standby status of their seller note?","url":"https://dealroom.so/sba-7a/questions/can-the-seller-s-post-closing-consulting-agreement-influence-the-standby-status-of-their-s"},{"question":"What specific language must a seller standby agreement include to ensure full standby status for 7(a) equity injection?","url":"https://dealroom.so/for-lenders/questions/what-specific-language-must-a-seller-standby-agreement-include-to-ensure-full-standby-stat"},{"question":"Does a seller's post-closing consulting agreement influence their standby note status with the SBA?","url":"https://dealroom.so/sba-7a/questions/does-a-seller-s-post-closing-consulting-agreement-influence-their-standby-note-status-with"},{"question":"What specific language is required in a seller note's subordination agreement to ensure it counts as full standby equity?","url":"https://dealroom.so/for-lenders/questions/what-specific-language-is-required-in-a-seller-note-s-subordination-agreement-to-ensure-it"},{"question":"What specific language must a standby agreement for a seller note include to meet SBA 7(a) requirements for equity injection?","url":"https://dealroom.so/for-lenders/questions/what-specific-language-must-a-standby-agreement-for-a-seller-note-include-to-meet-sba-7-a-"}]},"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 standby agreement","url":"https://dealroom.so/glossary/seller-standby-agreement","source_type":"DealRoom Data"}}