Glossary · People and paperwork
Holder of the Note
In short
This is the legal entity that owns the promissory note and is entitled to receive payments from the borrower. It's typically the lender who originated your SBA loan.
What it means in a deal
The lender you work with will be the initial Holder of the Note, meaning they legally own your debt. While the SBA guarantees a portion of the loan, the lender remains the primary party you deal with for payments, servicing, and any loan modifications. It's important to know who holds your note for all official communications.
Related terms
Common questions about Holder of the Note
- What happens if the seller's note holder files for bankruptcy during my SBA loan term?
- Can a U.S. Green Card holder (Permanent Resident) be an eligible applicant for a 7(a) loan?
- What is the required duration of a full standby seller note?
- Can I get an SBA 7(a) loan if I am a lawful permanent resident (Green Card holder) but not a U.S. citizen?
- Can the seller receive any form of compensation from the acquired business during the standby period of their seller note?
- What if the seller of the business insists on receiving a portion of their note repayment within the first year?
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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