Glossary · The loan itself
Workout plan
In short
An agreement between a borrower and lender to modify loan terms when the borrower faces financial distress, aiming to avoid default or liquidation. It's a structured attempt to resolve payment issues.
What it means in a deal
If your business struggles to make loan payments, your lender may propose a workout plan. This could involve temporarily reducing payments, extending the loan term, or other concessions. The goal is to keep the loan performing and prevent a full default and subsequent liquidation.
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 Workout plan
- What is the role of a "workout plan" in the liquidation of a defaulted 7(a) loan?
- What is the SBA's expectation for a lender's 'workout plan' for a defaulted 7(a) loan prior to liquidation?
- Is a comprehensive business plan mandatory for an SBA 7(a) loan?
- Is a detailed business plan necessary for an SBA 7(a) loan application?
- How important is a business plan for an SBA 7(a) loan application?
- Does the SBA require me to create a formal business plan to apply?
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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