{"ok":true,"canonical_url":"https://dealroom.so/glossary/standby-seller-note","api_url":"https://dealroom.so/api/public/glossary/standby-seller-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":"standby-seller-note","term":"Standby seller note","group":"Your money in the deal","definition":"This is a portion of the purchase price financed by the seller, where the seller agrees not to receive payments until the SBA loan is fully repaid. It counts as part of your required equity.","what_it_means":"A standby seller note is crucial for meeting the SBA's equity injection requirements, especially if you don't have enough cash. The SBA requires this note to be on \"full standby,\" meaning no principal or interest payments can be made until the SBA loan is repaid. This makes the seller's financing subordinate to the bank's, reducing the bank's risk.","url":"https://dealroom.so/glossary/standby-seller-note","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":"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"},{"slug":"subordinated-debt","term":"Subordinated Debt","url":"https://dealroom.so/glossary/subordinated-debt"}],"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 — Standby seller note","url":"https://dealroom.so/glossary/standby-seller-note","source_type":"DealRoom Data"}}