{"ok":true,"canonical_url":"https://dealroom.so/glossary/seller-standby-note","api_url":"https://dealroom.so/api/public/glossary/seller-standby-note","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-note","term":"Seller standby note","group":"Your money in the deal","definition":"A loan from the seller to the buyer, structured to be repaid only after the primary SBA loan. This arrangement helps bridge financing gaps and can reduce your required cash injection, making a deal more accessible.","what_it_means":"For an SBA 7(a) loan, any seller note must be on 'full standby,' meaning no payments (principal or interest) can be made until the SBA loan is repaid in full. This strengthens the business's cash flow for servicing the SBA debt and is a key component of your equity injection calculation.","url":"https://dealroom.so/glossary/seller-standby-note","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 full standby seller note accrue interest during the standby period?","url":"https://dealroom.so/for-lenders/questions/can-a-full-standby-seller-note-accrue-interest-during-the-standby-period"},{"question":"What is the required duration of a full standby seller note?","url":"https://dealroom.so/sba-7a/questions/what-is-the-required-duration-of-a-full-standby-seller-note"},{"question":"Can a partial standby seller note include a provision for interest payments during the standby period?","url":"https://dealroom.so/for-lenders/questions/can-a-partial-standby-seller-note-include-a-provision-for-interest-payments-during-the-sta"},{"question":"Can a fully-standby seller note accrue and pay interest to the seller during the SBA 7(a) loan's standby period?","url":"https://dealroom.so/for-lenders/questions/can-a-fully-standby-seller-note-accrue-and-pay-interest-to-the-seller-during-the-sba-7-a-l"},{"question":"Is a seller's personal guaranty required for providing a standby note?","url":"https://dealroom.so/sba-7a/questions/is-a-seller-s-personal-guaranty-required-for-providing-a-standby-note"},{"question":"Can a standby seller note accrue or pay interest during the loan?","url":"https://dealroom.so/sba-7a/questions/can-a-standby-seller-note-accrue-or-pay-interest-during-the-loan"}]},"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 note","url":"https://dealroom.so/glossary/seller-standby-note","source_type":"DealRoom Data"}}