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Glossary · Doing the deal

Loan assumption

In short

A buyer taking over the existing loan obligations of a business, rather than securing new financing. While rare with SBA loans, it can sometimes happen under specific circumstances.

What it means in a deal

SBA 7(a) loans are generally not assumable by a new buyer. The SBA requires the new owner to qualify for their own loan, making loan assumption an exception rather than the rule. Don't plan on assuming a seller's SBA loan; instead, budget for obtaining your own new 7(a) financing.

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 Loan assumption

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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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