Glossary · The loan itself
Acceleration of the Note(Acceleration)
In short
A clause in your loan agreement that allows the lender to demand immediate repayment of the entire outstanding loan balance if you default. This is a serious consequence of failing to meet your loan obligations.
What it means in a deal
If you breach the loan agreement (e.g., miss payments, fail to maintain insurance, or violate covenants), the lender can "accelerate" the note. This means the full remaining balance becomes due immediately, rather than over the original loan term. It's a key enforcement tool for the lender and a clear indicator of loan default.
Official sources
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.
Related terms
Common questions about Acceleration of the Note
- Can a seller note on full standby have an acceleration clause if the business defaults on the SBA loan?
- What is the required duration of a full standby seller note?
- Can the seller receive any form of compensation from the acquired business during the standby period of their seller note?
- What if the seller of the business insists on receiving a portion of their note repayment within the first year?
- What are the specific terms for the duration of a seller note on full standby?
- What is the required duration of a full standby seller note for an acquisition?
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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