Glossary · The loan itself
Non-Payment Clause
In short
A section in your loan agreement specifying what happens if you miss a payment. This details the lender's rights, which can include declaring the loan in default.
What it means in a deal
Understand your loan agreement's non-payment terms. Missing payments can trigger a loan default, accelerating the entire loan balance and potentially leading to collection actions. If you foresee payment issues, communicate immediately with your lender.
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 Non-Payment Clause
- Can I use gifted funds from a non-relative for my down payment?
- Can gift funds from a non-family investor count towards my down payment?
- For a partner buyout, what if the departing partner also has a non-compete payment?
- What if a proposed franchise agreement includes a clause restricting the borrower's operational control or management?
- Can I use non-cash assets like vehicles or equipment as part of my down payment?
- Can gift funds from a non-U.S. relative count towards my SBA 7(a) down payment?
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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