Glossary · The loan itself
Cash-out
In short
In an SBA context, this typically refers to refinancing existing debt where a portion of the new loan proceeds goes directly to the borrower for personal use or working capital beyond the refinance.
What it means in a deal
The SBA generally restricts "cash-out" transactions, especially for personal enrichment. Most 7(a) acquisition loans are for specific business purposes like purchase price, working capital, or equipment. If you're looking to extract funds, understand the strict limitations and permissible uses of proceeds to ensure eligibility.
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-out
- Can cash-out loan proceeds go to the remaining owner in a buyout?
- Can a cash-out refinance of my personal home count as equity injection for an acquisition?
- Can a borrower use a cash-out refinance from personal real estate for the equity injection?
- Can funds from a cash-out refinance of my investment property count towards my SBA 7(a) down payment?
- Are there specific restrictions on the maximum amount of cash-out allowed to the seller in an SBA 7(a) acquisition?
- If I am buying out a partner, does the SBA require the business to pass a cash flow test post-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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