Glossary · The loan itself
Cash Advance(Merchant Cash Advance)
In short
A short-term loan, often with high fees and interest, typically secured by future receivables. The SBA generally disallows using 7(a) funds to pay off these predatory loans.
What it means in a deal
If the target business has outstanding cash advances, your 7(a) loan cannot be used to pay them off. This type of debt is considered ineligible for refinancing with SBA funds due to its high cost and structure. The seller must resolve these prior to closing.
Official sources
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 Cash Advance
- Can a credit card cash advance be used for my down payment?
- Can I use funds from a personal credit card cash advance for my equity injection?
- How does a lender verify equity injection from a borrower's personal credit card cash advance?
- Besides cash, what non-cash assets can I contribute to meet the 10% equity injection for an $800,000 acquisition?
- Can cash in the business bank account count as collateral?
- Is there a minimum cash portion for the equity injection?
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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