Glossary · The loan itself
In short
This means interest is continuously calculated and added to the principal balance over time. Buyers need to understand how interest accrues to accurately forecast their total loan costs and repayment schedule.
On an SBA 7(a) loan, interest typically accrues daily based on the outstanding principal balance and the variable interest rate. Your monthly payment covers the accrued interest first, with the remainder reducing the principal. Early payments can reduce total interest paid.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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