My first Sba 7a loan payment was interest only - is that normal?

by a searcher from University of Texas at Austin

3 weeks ago

Sorry for the novice question, but my bank is incredibly unresponsive and not helpful at all. 

I closed on 6/20. The loan agreement says my first payment is due on the 10th of the 2nd month after closing - 8/10. 

After my first payment went through, I notice my principal balance didn’t change. I contacted my bank and they told me the first payment is only for interest. 

I asked for an amortization schedule but they haven’t provided one yet. 

I guess I just wanted to make sure this was standard practice? My only experience is with home loans where you start making p&i payments - not interest only. But I think in those situations you are also prepaying for the interest at closing before the first payment.

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lender from Eastern Illinois University

I would recommend reviewing your SBA Note. That Note will give you the payment terms. Depending on the loan you got it it not uncommon for the first payment to be interest only when the lender delays that first payment. Usually it is done this way due to the amount of interest that has accrued with the delay to the first payment. I hope this helps.

2 weeks ago | like reply | 0 likes

intermediary from Vanderbilt University

The SBA loan I got for a few gyms I used to own was interest only for 6 mos. I’d think that would be spelled out in either a term sheet or the actual loan agreement (as well as the amort sched). Good luck

3 weeks ago | like reply | 1 like

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