Glossary · The loan itself
In short
This is when you refinance an existing loan for a larger amount than currently owed, taking the difference in cash. It's often used with home equity but is generally not permitted with SBA 7(a) business acquisition loans.
You cannot use an SBA 7(a) acquisition loan to "cash out" equity from the business itself or from collateral you're bringing into the deal. The loan proceeds must be directly applied to the approved uses for the acquisition. Any equity injection must be "seasoned funds" and not round-tripped from the loan.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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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