Glossary · The loan itself
In short
This describes a seller note or other debt that agrees to be paid only after the SBA loan is fully satisfied, with no conditions or exceptions. It's a key requirement for SBA loan eligibility.
Any seller financing or certain other debt used to fund the deal must be unconditionally subordinated to your SBA 7(a) loan. This means the seller cannot receive principal or interest payments until your SBA loan is paid off. Confirm the standby agreement explicitly states this.
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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