Glossary · Your money in the deal
In short
A type of loan that can be converted into equity (ownership) in the company instead of being repaid with cash. As a buyer, you need to understand if any existing convertible debt will convert before or after your acquisition, impacting your ownership stake.
In a 7(a) acquisition, you're buying a business, not lending to it. Any existing convertible debt will either need to be paid off at closing, or convert into equity for the seller or a third party, affecting the capital structure you inherit. Make sure the deal terms clarify how this debt is handled.
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.
Figure out your down payment and equity injection
Tell us your purchase price and how you're funding the down payment — we'll sanity-check the equity injection and show what lenders will actually accept.
Free · No documents · Usually same-day