Glossary · The loan itself
In short
This clause in your loan agreement outlines specific events or failures that trigger a loan default, allowing the lender to demand immediate repayment. You need to understand what constitutes a default to avoid losing the business.
A default provision details scenarios like missing payments, failing to maintain insurance, or breaching covenants. In an SBA 7(a) loan, if you default, the lender will first try to work with you, but ultimately can seize collateral or call your personal guarantee. Know these terms before you sign.
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.
See which SBA lenders would fund your deal
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.
Free · No documents · Usually same-day