Glossary · Reading the business
Source of Repayment
In short
This refers to where the money will come from to pay back the SBA loan. As a buyer, you need to be sure the business generates enough profit to cover all loan payments.
What it means in a deal
Lenders primarily look at the business's historical cash flow and your projections to determine if it can support the debt. They'll also consider your personal income if it's a significant part of the global cash flow. Strong, consistent cash flow is critical for loan approval and your ability to succeed.
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 Source of Repayment
- What specific environmental due diligence is required for real estate collateral used as a secondary source of repayment?
- How does the SBA verify the source of my equity injection funds?
- What documentation is required to prove the source of my equity injection funds?
- What documentation is needed to verify the source of my cash equity injection?
- What documentation is required to verify the source of my cash equity injection?
- What specific documentation is required to verify the source of my equity injection funds?
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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