Glossary · The loan itself
In short
Debt incurred specifically to finance the acquisition of an asset, where the asset itself serves as collateral for that debt. Your SBA loan is a purchase money obligation for the business.
When your SBA 7(a) loan is used to buy a business, it's considered a purchase money obligation. This typically gives the lender a "first lien" position on the acquired assets. Understanding this lien priority is important as it affects how collateral is handled in the deal.
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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