Glossary · Doing the deal
Tax lien
In short
A legal claim placed on assets by a government agency (like the IRS) to secure payment of unpaid taxes. This lien must typically be resolved before an SBA loan can close.
What it means in a deal
The SBA and lenders will not close a loan if there are unresolved tax liens against the business or key principals. During due diligence, obtain IRS transcripts (Form 4506-T) for the seller and the business to uncover any liens. These must be satisfied or subordinated to the SBA's lien.
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 Tax lien
- How does an open personal tax lien affect my eligibility for an SBA 7(a) loan?
- Will having a significant tax lien against the acquired business prevent SBA 7(a) loan approval?
- Will a past tax lien or judgment on my credit report prevent SBA 7(a) loan approval?
- What if a business applicant has outstanding federal tax liens or delinquencies?
- Can a past federal tax lien, now paid in full, impact my eligibility for an SBA 7(a) loan?
- How does having a prior tax lien that has been paid off affect my SBA 7(a) loan eligibility?
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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