Glossary · Your money in the deal
Seller debt(Seller note)
In short
A portion of the purchase price that the seller agrees to finance, where the buyer repays the seller over time. This reduces the cash you need upfront for the acquisition.
What it means in a deal
Seller debt is a common component of small business acquisitions. For SBA 7(a) loans, any seller debt must be on full standby. This means the seller cannot receive payments until the SBA loan is repaid, strengthening the business's cash flow for the primary lender.
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 Seller debt
- What if the seller holds a significant portion of the acquired business's debt?
- How does a seller note on full standby affect the debt service coverage ratio calculation?
- What happens if a seller note on standby is subordinate to another non-SBA debt?
- Can I use an SBA 7(a) loan for debt consolidation of existing business debts?
- How does a seller note on partial standby affect an SBA 7(a) loan's debt service coverage ratio?
- Can I use working capital from an SBA loan to pay down existing seller debt not assumed by the buyer?
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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