Glossary · The loan itself
Principal deferment
In short
This is a period during a loan's term where you only pay interest, postponing principal payments. It can provide temporary cash flow relief.
What it means in a deal
Some SBA 7(a) loans, especially for start-ups or specific situations, might offer an initial period of principal deferment. This means your early payments are interest-only, easing the immediate cash flow burden as you ramp up. Understand the deferment period and when full principal and interest payments begin.
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 Principal deferment
- Can a 7(a) lender approve a deferment of principal and interest payments without prior SBA approval?
- Can a lender approve a deferment period without prior SBA approval?
- Can a lender approve a deferment period for my SBA 7(a) loan without SBA approval?
- When can a lender approve a deferment period for a 7(a) loan without prior SBA approval?
- Can a lender extend the payment deferment period on a 7(a) loan without prior SBA approval?
- Can a lender approve a deferment of payments for a 7(a) loan without prior SBA approval?
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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