Glossary · The loan itself
Third-party loan(External loan)
In short
This is debt from someone other than the buyer or seller, like a bank or equipment lender. When buying a business, you need to understand which existing third-party loans will be paid off or assumed.
What it means in a deal
In an acquisition, existing third-party debt must be addressed. Typically, the seller pays off all business debt at closing. If you assume a loan, ensure the terms are favorable and the lender approves the change of ownership. Verify all liens are released on assets being acquired.
Official sources
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 Third-party loan
- Can a third-party loan, not from the seller, count towards the minimum equity injection?
- What specific language must a non-SBA third-party standby agreement include to ensure eligibility?
- Can an SBA 7(a) loan finance the purchase of intellectual property rights from a third party?
- Can I use an SBA 7(a) loan to purchase a business from an unrelated third party?
- Can a loan secured by non-business personal assets from a third party count as equity injection?
- How does a lender verify the full standby status of a non-SBA third-party debt?
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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