{"ok":true,"canonical_url":"https://dealroom.so/glossary/active-enterprise","api_url":"https://dealroom.so/api/public/glossary/active-enterprise","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"active-enterprise","term":"Active enterprise","group":"Reading the business","definition":"An active enterprise is a business engaged in ongoing commercial activity, providing goods or services. The SBA 7(a) loan program is exclusively for these types of businesses, not passive investments.","what_it_means":"To qualify for a 7(a) loan, the business you're acquiring must clearly demonstrate it's an active enterprise with employees and regular operations. Businesses primarily generating passive income, like real estate holding companies, are generally ineligible. Your lender will verify the business's NAICS code and activities meet this requirement.","url":"https://dealroom.so/glossary/active-enterprise","official_sources":[{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"},{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"passive-rental-income","term":"Passive rental income","url":"https://dealroom.so/glossary/passive-rental-income"},{"slug":"ineligible-businesses-rule","term":"Ineligible businesses rule","url":"https://dealroom.so/glossary/ineligible-businesses-rule"},{"slug":"naics-code","term":"NAICS code","url":"https://dealroom.so/glossary/naics-code"},{"slug":"7a-loan","term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"}],"related_questions":[{"question":"How does the SBA define 'active ownership' for the 24-month rule?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-define-active-ownership-for-the-24-month-rule"},{"question":"Can an SBA 7(a) loan finance the buyout of a partner who will remain active in the business?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-finance-the-buyout-of-a-partner-who-will-remain-active-in-the-business"},{"question":"Can a 7(a) loan finance a partial buyout where the seller retains a minority stake and remains active?","url":"https://dealroom.so/for-lenders/questions/can-a-7-a-loan-finance-a-partial-buyout-where-the-seller-retains-a-minority-stake-and-rema"},{"question":"What happens if a buyer for an SBA 7(a) loan has an active tax lien, even if on a payment plan?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-a-buyer-for-an-sba-7-a-loan-has-an-active-tax-lien-even-if-on-a-payment-pl"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Active enterprise","url":"https://dealroom.so/glossary/active-enterprise","source_type":"DealRoom Data"}}