{"ok":true,"canonical_url":"https://dealroom.so/glossary/family-member-transaction","api_url":"https://dealroom.so/api/public/glossary/family-member-transaction","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":"family-member-transaction","term":"Family member transaction","group":"Doing the deal","definition":"This is when you buy a business from a close family member. The SBA has specific rules to ensure these deals are legitimate and not just a way to get cheap financing.","what_it_means":"The SBA views family member transactions as potentially not \"arms-length\" and requires additional scrutiny. The seller cannot remain with the business in any capacity for at least 12 months post-closing to avoid affiliation concerns, and the transaction must be clearly structured as a true change of ownership.","url":"https://dealroom.so/glossary/family-member-transaction","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":"arms-length","term":"Arms-length","url":"https://dealroom.so/glossary/arms-length"},{"slug":"affiliation","term":"Affiliation","url":"https://dealroom.so/glossary/affiliation"},{"slug":"change-of-control","term":"Change of control","url":"https://dealroom.so/glossary/change-of-control"},{"slug":"seller-note","term":"Seller note","url":"https://dealroom.so/glossary/seller-note"}],"related_questions":[{"question":"What documentation is required to verify equity injection from a gift from a non-family member?","url":"https://dealroom.so/for-lenders/questions/what-documentation-is-required-to-verify-equity-injection-from-a-gift-from-a-non-family-me"},{"question":"Can money gifted from a family member be used for my SBA 7(a) equity injection?","url":"https://dealroom.so/sba-loans/basics/can-money-gifted-from-a-family-member-be-used-for-my-sba-7-a-equity-injection"},{"question":"Can an SBA 7(a) loan be used to purchase a business from a family member?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-be-used-to-purchase-a-business-from-a-family-member"},{"question":"How should a lender verify funds gifted from a non-immediate family member for equity injection?","url":"https://dealroom.so/for-lenders/questions/how-should-a-lender-verify-funds-gifted-from-a-non-immediate-family-member-for-equity-inje"},{"question":"Can a gift from a family member be used for my SBA 7(a) down payment?","url":"https://dealroom.so/sba-7a/questions/can-a-gift-from-a-family-member-be-used-for-my-sba-7-a-down-payment"},{"question":"Can a loan from a non-owner family member count towards equity injection if on full standby?","url":"https://dealroom.so/for-lenders/questions/can-a-loan-from-a-non-owner-family-member-count-towards-equity-injection-if-on-full-standb"}]},"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 — Family member transaction","url":"https://dealroom.so/glossary/family-member-transaction","source_type":"DealRoom Data"}}