Glossary · Doing the deal
In short
These are lending actions that don't follow sound financial principles or SBA rules, such as insufficient due diligence or weak collateral. Such practices can lead to the SBA denying its guaranty.
While primarily a lender's concern, you, as the buyer, should understand that lenders must adhere to "prudent lending standards" to maintain the SBA guaranty. If your lender cuts corners, it could jeopardize the loan's SBA backing, even after closing, so choose a reputable PLP lender.
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.
Line up financing while you're under LOI
Tell us the business, the price, and your timeline — we'll match you with lenders who close deals like yours and flag anything that stalls the process.
Free · No documents · Usually same-day