Glossary · Your money in the deal
Seller Financing on Full Standby
In short
This is when the seller provides a loan for part of the purchase price, but you don't make any payments on it until the SBA loan is fully repaid. It counts towards your equity injection.
What it means in a deal
When a seller note is on full standby, it means all principal and interest payments are deferred for the entire term of the SBA 7(a) loan. This significantly strengthens your global cash flow, as you only have one debt payment. This type of seller financing is common in SBA deals and can help meet the equity injection requirement.
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 Financing on Full Standby
- What specific due diligence is needed for seller financing that is not on full standby?
- What is the maximum allowed equity injection percentage that can come from seller financing on full standby?
- If a seller note is on full standby, when can the seller start receiving principal payments?
- Under what conditions can a seller note on full standby be repaid early?
- Can a seller note on full standby still be secured by business assets?
- Can a seller note on full standby accrue interest during the standby period, even if not paid?
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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