Glossary · Your money in the deal
In short
This is a portion of the seller financing that is not paid back until the SBA loan is fully repaid, or only paid back with strict limitations. It's often required by the SBA to count towards your equity injection.
For an SBA 7(a) loan, any seller note used to bridge the gap between your cash injection and the loan amount must typically be on "full standby" for the life of the loan. This means no principal or interest payments are made on it until the SBA loan is paid off, making it function like equity in the eyes of the SBA. A "partial standby" might allow interest-only payments.
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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