For SBA lenders
Short answer
A lender can approve an interest-only payment period without prior SBA approval if it's a temporary measure for a financially distressed borrower and meets specific criteria outlined in the Servicing Matrix.
SBA's Servicing and Liquidation Actions 7(a) Lender Matrix specifies certain actions lenders can take without prior SBA approval. An interest-only period may be permitted for up to six months (or longer, with SBA approval) if the borrower is experiencing temporary financial hardship, the action is prudent, and it doesn't extend the loan's maturity beyond the maximum SBA term.
A borrower experiences a sudden, temporary drop in revenue due to a natural disaster. The lender, after reviewing financials, determines a 3-month interest-only period will help the borrower recover without jeopardizing the loan. The lender approves this modification and documents their rationale in the loan file, without seeking prior SBA approval.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 57 - 7(a) Loan Servicing and Liquidation
Servicing and Liquidation Actions 7(a) Lender Matrix
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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