Glossary · The loan itself
Accrue Interest
In short
This means interest is continuously calculated and added to the principal balance over time. Buyers need to understand how interest accrues to accurately forecast their total loan costs and repayment schedule.
What it means in a deal
On an SBA 7(a) loan, interest typically accrues daily based on the outstanding principal balance and the variable interest rate. Your monthly payment covers the accrued interest first, with the remainder reducing the principal. Early payments can reduce total interest paid.
Related terms
Common questions about Accrue Interest
- Can a full standby seller note accrue interest during the standby period?
- Can a standby seller note accrue or pay interest during the loan?
- When can a standby seller note accrue or pay interest during the loan term?
- Can a seller note accrue interest during the full standby period for an SBA loan?
- Can a seller note on full standby accrue interest during the standby period, even if not paid?
- If a seller note on full standby, can it still accrue interest during the SBA loan term?
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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