Glossary · Your money in the deal
Full Standby Status
In short
A condition where a seller note or other debt owed to an associate cannot receive any principal or interest payments until the SBA loan is fully repaid. This strengthens the SBA loan's position.
What it means in a deal
If the seller takes a note, or if there's other debt from an associate, the SBA often requires it to be on Full Standby. This means you cannot pay that debt until your SBA loan is paid off, ensuring your cash flow goes to the senior SBA debt. It's a key part of your equity injection.
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 Full Standby Status
- What are the rules if a seller note is not on full standby status?
- What specific language must a seller standby agreement include to ensure full standby status for 7(a) equity injection?
- How does a lender verify the full standby status of a non-SBA third-party debt?
- How must a lender document the full standby status of a seller note to ensure SBA compliance?
- How does a lender verify a seller note's full standby status for 7(a) equity injection compliance?
- What specific documentation does a lender need to confirm full standby status for a seller note in an 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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