Glossary · Reading the business
Economic Life(Useful life)
In short
The period over which an asset is expected to be useful to its owner, generating revenue or providing service. The SBA uses this to determine loan terms for certain assets.
What it means in a deal
When financing assets like equipment or leasehold improvements, the SBA loan term cannot exceed the asset's economic life. An appraisal will often assess this. Ensure the proposed loan term aligns with the useful life of the major assets you are acquiring to avoid issues with loan approval.
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 Economic Life
- How does a lender determine affiliation for size purposes when evaluating common economic dependence?
- Can I use a conditional grant from a local economic development agency as equity?
- Under what conditions does a shared economic interest trigger affiliation for SBA size standard purposes?
- When is term life insurance more suitable than permanent life insurance for business protection?
- Is a decreasing term life insurance policy acceptable for the SBA's life insurance requirement on a 7(a) loan?
- How are appropriate business life insurance coverage amounts calculated?
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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