Glossary · The loan itself
In short
A short-term loan, often with high fees and interest, typically secured by future receivables. The SBA generally disallows using 7(a) funds to pay off these predatory loans.
If the target business has outstanding cash advances, your 7(a) loan cannot be used to pay them off. This type of debt is considered ineligible for refinancing with SBA funds due to its high cost and structure. The seller must resolve these prior to closing.
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
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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Tell us the business, the price, and where you are — we'll point you to the lenders most likely to approve a 7(a) like yours and flag what trips up approval.
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