{"ok":true,"canonical_url":"https://dealroom.so/glossary/standby-agreement","api_url":"https://dealroom.so/api/public/glossary/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":"standby-agreement","term":"Standby agreement","group":"Your money in the deal","definition":"A formal agreement where a lender or seller defers payments on a debt, allowing the SBA loan to take priority. It's crucial for meeting SBA equity injection requirements without impacting the business's immediate cash flow.","what_it_means":"If you're injecting seller financing or other debt that counts towards your equity, a standby agreement is often required by the SBA. It ensures that the business prioritizes paying the SBA loan before other specified debts, making your financing eligible as equity. Make sure the terms are clear and align with SBA rules, especially regarding repayment timing.","url":"https://dealroom.so/glossary/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":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"slug":"seller-note","term":"Seller note","url":"https://dealroom.so/glossary/seller-note"},{"slug":"subordinated-debt","term":"Subordinated Debt","url":"https://dealroom.so/glossary/subordinated-debt"},{"slug":"full-standby-agreement","term":"Full Standby Agreement","url":"https://dealroom.so/glossary/full-standby-agreement"}],"related_questions":[{"question":"What are the specific conditions for an acceptable full standby agreement?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-conditions-for-an-acceptable-full-standby-agreement"},{"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":"What specific language must a non-SBA third-party standby agreement include to ensure eligibility?","url":"https://dealroom.so/for-lenders/questions/what-specific-language-must-a-non-sba-third-party-standby-agreement-include-to-ensure-elig"},{"question":"What specific language must a full standby agreement contain to be acceptable to the SBA?","url":"https://dealroom.so/for-lenders/questions/what-specific-language-must-a-full-standby-agreement-contain-to-be-acceptable-to-the-sba"},{"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"}]},"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 — Standby agreement","url":"https://dealroom.so/glossary/standby-agreement","source_type":"DealRoom Data"}}