{"ok":true,"canonical_url":"https://dealroom.so/glossary/downline","api_url":"https://dealroom.so/api/public/glossary/downline","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":"downline","term":"Downline","group":"Reading the business","definition":"In a multi-level marketing (MLM) or direct sales business, your downline refers to the network of distributors you've recruited and their subsequent recruits. You earn commissions on their sales.","what_it_means":"If you're considering a business with an MLM component, the strength and activity of the downline are crucial for revenue generation. However, be wary: a business heavily reliant on downline recruitment rather than genuine product sales may be considered a pyramidal distribution system, which is ineligible for SBA financing. Understand how commissions are structured.","url":"https://dealroom.so/glossary/downline","official_sources":[],"related":[{"slug":"pyramidal-distribution-system","term":"Pyramidal distribution system","url":"https://dealroom.so/glossary/pyramidal-distribution-system"},{"slug":"multi-level-marketing-company","term":"Multi-Level Marketing Company","url":"https://dealroom.so/glossary/multi-level-marketing-company"},{"slug":"compliance","term":"Compliance","url":"https://dealroom.so/glossary/compliance"},{"slug":"business-plan","term":"Business plan","url":"https://dealroom.so/glossary/business-plan"}],"related_questions":[]},"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 — Downline","url":"https://dealroom.so/glossary/downline","source_type":"DealRoom Data"}}