{"ok":true,"canonical_url":"https://dealroom.so/glossary/standby-period","api_url":"https://dealroom.so/api/public/glossary/standby-period","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-period","term":"Standby Period","group":"Your money in the deal","definition":"A Standby Period is a time, typically 1-2 years, during which a seller note or other subordinated debt cannot receive principal or interest payments. This makes your equity injection look stronger.","what_it_means":"If a portion of the seller's proceeds is structured as a seller note to meet the equity injection requirement, it must be on \"full standby\" for at least the first 24 months. This means no payments can be made on the note during this period, ensuring the business's cash flow prioritizes the SBA loan. Understand how any seller financing impacts your required equity injection and the business's debt service.","url":"https://dealroom.so/glossary/standby-period","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-note","term":"Seller note","url":"https://dealroom.so/glossary/seller-note"},{"slug":"standby","term":"Standby","url":"https://dealroom.so/glossary/standby"},{"slug":"full-standby-agreement","term":"Full Standby Agreement","url":"https://dealroom.so/glossary/full-standby-agreement"},{"slug":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"}],"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":"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 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 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":"Can a seller note accrue interest during the full standby period for an SBA loan?","url":"https://dealroom.so/sba-7a/questions/can-a-seller-note-accrue-interest-during-the-full-standby-period-for-an-sba-loan"},{"question":"What if the seller wants to be paid back earlier than the SBA standby period allows?","url":"https://dealroom.so/sba-7a/questions/what-if-the-seller-wants-to-be-paid-back-earlier-than-the-sba-standby-period-allows"}]},"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 Period","url":"https://dealroom.so/glossary/standby-period","source_type":"DealRoom Data"}}