Glossary · People and paperwork
Acceleration clause
In short
This clause in a loan agreement allows the lender to demand immediate repayment of the entire outstanding loan balance if certain conditions (defaults) are met. It's a critical risk to understand.
What it means in a deal
An acceleration clause is standard in nearly all loan documents, including SBA loans. It means if you default on payments, violate a covenant, or fail to meet other loan terms, the lender can call the entire loan due. Understand every condition that could trigger acceleration, as it can lead to immediate financial distress and business loss.
Related terms
Common questions about Acceleration clause
- Can a seller note on full standby have an acceleration clause if the business defaults on the SBA loan?
- What if a proposed franchise agreement includes a clause restricting the borrower's operational control or management?
- What specific franchise agreement clauses are generally unacceptable to the SBA and could prevent financing?
- How does the SBA review franchise agreements for compliance if there are unusual clauses regarding termination or transfer?
- What specific types of clauses in a franchise agreement would constitute "undue control" by the franchisor, rendering it ineligible for 7(a) financing?
Defined by CapBench 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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