{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/what-are-the-specific-terms-for-the-duration-of-a-seller-note-on-full-standby","api_url":"https://dealroom.so/api/public/questions/what-are-the-specific-terms-for-the-duration-of-a-seller-note-on-full-standby","question":"What are the specific terms for the duration of a seller note on full standby?","topic":"Seller Notes & Standby","audience":"borrower","bot_mode":"buyer","short_answer":"A seller note on full standby must be for a term that is at least as long as the SBA 7(a) loan term, or longer, to ensure full subordination.","rule":"To be considered full standby equity, the seller note cannot be repaid until the SBA 7(a) loan is paid in full. Therefore, its maturity date must be equal to or later than the maturity date of the SBA loan. This ensures the funds are truly at risk for the duration of the SBA loan.","example":"If your SBA 7(a) loan for a business acquisition has a 10-year term, a seller note on full standby would also need to have a term of at least 10 years, meaning the seller would not receive principal payments until after the 10-year mark.","what_lenders_check":"Lenders meticulously review the standby agreement to confirm the seller note's term aligns with SBA regulations. They ensure that the full standby period effectively covers the entire repayment period of the SBA loan, protecting the SBA's senior lien position.","required_facts":["Seller note term","SBA loan term","Full standby duration","Maturity synchronization"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[{"question":"Can a seller note on full standby still be secured by business assets?","url":"https://dealroom.so/sba-7a/questions/can-a-seller-note-on-full-standby-still-be-secured-by-business-assets"},{"question":"What are the requirements if the seller wants to stay involved in the business post-acquisition?","url":"https://dealroom.so/sba-7a/questions/what-are-the-requirements-if-the-seller-wants-to-stay-involved-in-the-business-post-acquis"},{"question":"If a seller note is on full standby, when can the seller start receiving principal payments?","url":"https://dealroom.so/sba-7a/questions/if-a-seller-note-is-on-full-standby-when-can-the-seller-start-receiving-principal-payments"},{"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":"Is there a maximum percentage of the equity injection that can come from a seller note on standby?","url":"https://dealroom.so/sba-7a/questions/is-there-a-maximum-percentage-of-the-equity-injection-that-can-come-from-a-seller-note-on-"},{"question":"What specific terms must a seller note on full standby have to be acceptable for an SBA loan?","url":"https://dealroom.so/sba-7a/questions/what-specific-terms-must-a-seller-note-on-full-standby-have-to-be-acceptable-for-an-sba-lo"}],"related_terms":[{"term":"Seller note on standby","url":"https://dealroom.so/glossary/seller-note-on-standby"},{"term":"Seller Financing on Full Standby","url":"https://dealroom.so/glossary/seller-financing-on-full-standby"},{"term":"Seller standby note","url":"https://dealroom.so/glossary/seller-standby-note"},{"term":"Standby seller note","url":"https://dealroom.so/glossary/standby-seller-note"},{"term":"Standby Terms","url":"https://dealroom.so/glossary/standby-terms"},{"term":"Partial Standby Seller Note","url":"https://dealroom.so/glossary/partial-standby-seller-note"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-14","sba_rule_sources_checked_through":"2026-06-14"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/what-are-the-specific-terms-for-the-duration-of-a-seller-note-on-full-standby","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}