Glossary · People and paperwork
Promissory Note
In short
This is a legal document where you, as the borrower, promise to repay a specific amount of money to the lender. It outlines the agreed-upon terms, including the interest rate and repayment schedule.
What it means in a deal
This is the foundational legal document detailing your obligation to repay the SBA 7(a) loan. It specifies the principal amount, the interest rate (which is often variable), the amortization period, and all other terms of your debt. Review it meticulously to fully grasp your exact repayment responsibilities and any potential prepayment penalties.
Related terms
Common questions about Promissory Note
- Can a borrower contribute a promissory note from a third party as part of their equity injection?
- Besides cash and seller notes, what other buyer contributions qualify for equity?
- What is the required duration of a full standby seller note?
- Can a full standby seller note accrue interest during the standby period?
- Is a seller's personal guaranty required for providing a standby note?
- Can a standby seller note accrue or pay interest during the loan?
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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