Glossary · Doing the deal
Assumption Agreement
In short
This is a legal document where a new party agrees to take on the financial obligations of an existing loan. In an acquisition, you might assume seller debt, though SBA 7(a) loans are generally not assumable.
What it means in a deal
While SBA 7(a) loans are generally not assumable by a new buyer, an assumption agreement could apply to other existing business debts you take on. If you're assuming any non-SBA debt from the seller, your lender will scrutinize these terms as they impact your repayment capacity and total leverage.
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 Assumption Agreement
- Can a buyer's assumption of existing business debt count as part of the equity injection?
- How does life insurance effectively fund a business buy-sell agreement?
- How does the purchase agreement structure affect an SBA partner buyout?
- How does an operating agreement impact an SBA partner buyout loan?
- What happens if the seller terminates the purchase agreement mid-process?
- What are the specific conditions for an acceptable full standby agreement?
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.
Line up financing while you're under LOI
Tell us the business, the price, and your timeline — we'll match you with lenders who close deals like yours and flag anything that stalls the process.
Free · No documents · Usually same-day
Backed by data on 1,000+ SBA lenders and 300,000+ funded deals. Your details go only to lending partners you ask to be matched with — never sold to advertisers.