Glossary · The loan itself
Principal repayment
In short
The portion of your loan payment that reduces the actual amount borrowed, distinct from the interest portion. This repayment gradually builds your equity in the acquired business.
What it means in a deal
Your SBA loan payments will consist of both principal and interest. Early in the loan term, a larger portion of each payment typically goes towards interest. Understanding your amortization schedule shows you how quickly you are paying down the actual debt and building equity in the business.
Official sources
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 repayment
- If a seller note is on full standby, when can the principal repayments legally begin?
- Is there a prepayment penalty for early repayment of my SBA 7(a) loan if the principal balance is under $500,000?
- What is the typical repayment term for working capital only?
- 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?
- Does the SBA set specific repayment schedules for 7(a) loans?
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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