Glossary · The loan itself
Performing loan
In short
This is a loan where the borrower is making all scheduled principal and interest payments on time. As a buyer, your 7(a) loan is expected to be a performing loan from day one.
What it means in a deal
Lenders prefer to originate and hold performing loans, as they generate consistent revenue and carry lower risk. If you miss payments, your loan becomes non-performing, triggering penalties and potentially leading to default and liquidation. Maintain strong cash flow to ensure your loan performs.
Related terms
Common questions about Performing loan
- Are SBA 7(a) loans only for businesses unable to get traditional bank loans?
- What exactly is an SBA 7(a) loan, and who offers these loans?
- How do SBA 7(a) loan interest rates compare to standard commercial loans?
- What makes an SBA 7(a) loan 'government-backed' compared to other loans?
- Does the SBA check for past defaults on federal debts, like student loans or prior SBA loans?
- How do SBA loan guaranty fees for FY2026 apply to loans below $500,000?
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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