Glossary · Your money in the deal
In short
This is a loan or debt that explicitly ranks below all other debt, especially the SBA loan, in terms of repayment priority. It's often used for seller notes to meet SBA equity injection requirements.
For an SBA 7(a) loan, any seller note or other debt that counts towards the buyer's equity injection must be fully subordinated to the SBA loan. This means the seller cannot be paid until the SBA loan is paid in full, and they typically cannot take collateral. A "full standby agreement" formalizes this, ensuring the SBA loan has first claim on cash flow and assets.
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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