Glossary · The loan itself
Principal
In short
The original amount of money borrowed, or the portion of a loan that remains unpaid, excluding interest. This is the core amount you actually borrowed for the business acquisition.
What it means in a deal
When you make loan payments, a portion goes to interest, and the remainder reduces your principal balance. A larger principal payment means you pay off the loan faster and incur less total interest over the loan's term.
Related terms
Common questions about Principal
- What happens to an SBA loan if a principal owner or guarantor dies unexpectedly?
- What if a principal has a recent criminal history that is not a felony?
- If a seller note is on full standby, when can the principal repayments legally begin?
- How does the SBA handle a short-term deferral of principal payments at the start?
- Can a seller note be subordinate to the SBA loan but still receive principal payments?
- What is the required personal ownership percentage to be considered a 'principal' by the SBA?
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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