Glossary · Your money in the deal
Disguised loan
In short
This refers to funds that appear to be equity injection but are actually a loan in disguise, often with an unwritten repayment expectation. The SBA strictly prohibits disguised loans as part of your down payment.
What it means in a deal
Lenders look for round-tripped funds or contributions from related parties that lack proper documentation. Any funds you claim as out of pocket equity must be verifiably yours and not subject to an unwritten repayment obligation to avoid being flagged as a disguised loan.
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 Disguised loan
- Are SBA 7(a) loans only for businesses unable to get traditional bank loans?
- What exactly is an SBA 7(a) loan, and who offers these loans?
- How do SBA 7(a) loan interest rates compare to standard commercial loans?
- What makes an SBA 7(a) loan 'government-backed' compared to other loans?
- Does the SBA check for past defaults on federal debts, like student loans or prior SBA loans?
- How do SBA loan guaranty fees for FY2026 apply to loans below $500,000?
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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