Glossary · The loan itself
Interest-Only Payment Period
In short
A temporary period where your loan payments only cover the interest accrued, not any principal. This can provide some initial cash flow relief for your new business.
What it means in a deal
Some SBA 7(a) loans, especially for acquisitions with significant integration costs, may include an initial interest-only period. This helps conserve cash flow early on when the business might be adjusting. Understand when principal payments begin and plan your cash flow accordingly.
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 Interest-Only Payment Period
- Under what specific circumstances can a lender approve an interest-only payment period for a 7(a) loan without prior SBA approval?
- Can a full standby seller note accrue interest during the standby period?
- What is the typical repayment period for an SBA 7(a) loan for a business acquisition only?
- Can a seller note accrue interest during the full standby period for an SBA loan?
- Can a lender extend the payment deferment period on a 7(a) loan without prior SBA approval?
- Can a partial standby seller note include a provision for interest payments during the standby period?
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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