{"ok":true,"canonical_url":"https://dealroom.so/glossary/epc-oc-structure","api_url":"https://dealroom.so/api/public/glossary/epc-oc-structure","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":"epc-oc-structure","term":"EPC/OC structure","group":"The loan itself","definition":"This refers to a common setup where an Eligible Passive Company (EPC) owns the real estate and leases it to an Operating Company (OC), which runs the business and is the SBA loan borrower. It separates real estate ownership from business operations.","what_it_means":"The EPC/OC structure is often used when an SBA loan finances both a business acquisition and the real estate it operates from. The OC is the actual borrower, and the EPC often provides the real estate as collateral. Understand that both entities will be linked by lease agreements and potentially cross-guarantees, requiring careful review.","url":"https://dealroom.so/glossary/epc-oc-structure","official_sources":[{"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"},{"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"}],"related":[{"slug":"owner-occupied-commercial-real-estate","term":"Owner-occupied commercial real estate","url":"https://dealroom.so/glossary/owner-occupied-commercial-real-estate"},{"slug":"lease-agreement","term":"Lease agreement","url":"https://dealroom.so/glossary/lease-agreement"},{"slug":"collateral","term":"Collateral","url":"https://dealroom.so/glossary/collateral"},{"slug":"co-borrower","term":"Co-borrower","url":"https://dealroom.so/glossary/co-borrower"}],"related_questions":[{"question":"How does the purchase agreement structure affect an SBA partner buyout?","url":"https://dealroom.so/sba-7a/questions/how-does-the-purchase-agreement-structure-affect-an-sba-partner-buyout"},{"question":"Can I change my business structure after getting an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/can-i-change-my-business-structure-after-getting-an-sba-7-a-loan"},{"question":"How does seller financing structure impact the required equity injection for a business acquisition?","url":"https://dealroom.so/for-lenders/questions/how-does-seller-financing-structure-impact-the-required-equity-injection-for-a-business-ac"},{"question":"Are there specific requirements for the business entity structure for an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/are-there-specific-requirements-for-the-business-entity-structure-for-an-sba-7-a-loan"},{"question":"Does my business legal structure (like LLC or Sole Proprietorship) affect SBA 7(a) loan eligibility?","url":"https://dealroom.so/sba-loans/basics/does-my-business-legal-structure-like-llc-or-sole-proprietorship-affect-sba-7-a-loan-eligi"},{"question":"Can an earn-out provision in a purchase agreement affect 7(a) loan eligibility or structure?","url":"https://dealroom.so/for-lenders/questions/can-an-earn-out-provision-in-a-purchase-agreement-affect-7-a-loan-eligibility-or-structure"}]},"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 — EPC/OC structure","url":"https://dealroom.so/glossary/epc-oc-structure","source_type":"DealRoom Data"}}