Glossary of SBA acquisition loan terms

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Change of ownership: A loan the lender recorded as being used to buy an existing business. In the SBA file this is the value "Change of Ownership" in the BusinessAge field, recorded from FY2018. It is the filter for every figure on this site.
7(a) loan: The SBA's primary loan guaranty program. A participating lender makes the loan and the SBA guarantees part of it. The maximum loan is $5 million.
Gross approval: The total dollar amount of the loan approved, before any cancellation. Dollar totals and median loan figures on this site use this field.
SBA guaranteed approval: The portion of the gross approval that the SBA guarantees to the lender. Divided by gross approval, it gives the guaranty share.
Charge-off: The SBA's final loss recognition on a defaulted loan after collection efforts. It typically comes a year or more after the first missed payments. The charge-off rate on this site is charged-off loans divided by disbursed loans in the seasoned cohort. It is not a delinquency rate.
Paid in full: A loan status meaning the borrower repaid the loan completely, including by refinance or early payoff. It is not the same as a successful business outcome.
Cancelled or undisbursed: Loans with status CANCLD (approved but cancelled) or COMMIT (approved but not yet disbursed). They are counted in loan totals but excluded from charge-off rate calculations.
Seasoned cohort: Loans approved in a window old enough that most losses have surfaced. On this site, approvals FY2018 to FY2021 for acquisition loans. Charge-off rates are quoted only for this cohort.
Fiscal year: The federal fiscal year, October 1 to September 30. FY2025 runs from October 2024 to September 2025. The latest year in the file can be partial.
NAICS: North American Industry Classification System, the six-digit code lenders assign to a business to describe its industry. Codes changed between the 2017 and 2022 editions; this site merges the common splits.
Franchise code: The SBA's identifier for a franchise brand. This site groups franchise loans by code because names are entered inconsistently.
Project state: The state where the financed business operates, as recorded by the lender. It may differ from the borrower's mailing state.
Equity injection: Cash the buyer contributes toward the project cost. Lenders commonly require at least 10% of total project cost for acquisitions.
Seller note / standby: A loan from the seller to the buyer that covers part of the price. Lenders often require it to be on standby, meaning the buyer makes no payments on it for a set period, so that it can count toward equity.
Preferred Lender Program: An SBA program under which delegated lenders may make credit decisions on the SBA's behalf, which can shorten approval times.
Term: The length of the loan in months. The median acquisition loan on this site has a 120-month term.
Initial interest rate: The rate at approval. For variable-rate loans it can change later, so averages on this site blend fixed and variable loans from different rate environments.
Jobs supported: The number of jobs the borrower reported the loan would retain or create. It is self-reported at application.
Collateral indicator: A flag in the SBA file showing whether the loan was recorded as having collateral. It does not describe the type or value.
Secondary market sale: The sale of the SBA-guaranteed portion of a loan to an investor. It does not change the borrower's obligations.