Glossary · The loan itself
In short
This means a period where required insurance policies (like hazard or life insurance) were not in effect. Lenders consider this a serious issue as it exposes the collateral and the loan to uninsured risks.
The SBA requires various insurance coverages, including hazard insurance on collateral and often key man life insurance for principals, to be continuously in force. A lapse in coverage on existing policies will be a red flag during underwriting. Ensure all required policies are active and properly assigned to the lender at closing to avoid delays or loan conditions.
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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