Glossary · The loan itself
Principal and Interest Payment(P&I Payment)
In short
This is the regular payment you make on your loan, covering both the portion that reduces your outstanding balance (principal) and the cost of borrowing (interest). It's your primary recurring loan expense.
What it means in a deal
Your SBA 7(a) loan will have a fixed or variable Principal and Interest Payment, typically monthly. Understand how changes in the base rate (like WSJ Prime or Term SOFR) can affect your payment if your loan is variable. This payment is a critical component of your debt service and cash flow after debt service.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Principal and Interest Payment
- Can a 7(a) lender approve a deferment of principal and interest payments without prior SBA approval?
- If a seller note is structured with deferred principal payments but immediate interest payments, does it still qualify as full standby?
- What specific conditions allow a seller note with deferred principal payments but immediate interest to qualify as full standby?
- If a seller note has deferred principal payments but pays interest from day one, does it qualify as full standby?
- If a seller provides a note for $100,000, can they receive principal or interest payments from the business during the SBA loan term?
- How does the SBA handle a short-term deferral of principal payments at the start?
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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