{"ok":true,"canonical_url":"https://dealroom.so/glossary/financial-interdependence","api_url":"https://dealroom.so/api/public/glossary/financial-interdependence","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":"financial-interdependence","term":"Financial Interdependence","group":"Reading the business","definition":"This describes a situation where the acquired business relies heavily on another business or entity for its financial health. This can be a red flag for buyers, indicating concentration risk.","what_it_means":"The SBA scrutinizes financial interdependence, especially if the seller has other businesses that supply or buy from the target business. This creates \"affiliation\" concerns and concentration risk. You need to identify any such relationships during due diligence and understand how they impact the business's standalone viability and revenue streams post-acquisition.","url":"https://dealroom.so/glossary/financial-interdependence","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"}],"related":[{"slug":"affiliation","term":"Affiliation","url":"https://dealroom.so/glossary/affiliation"},{"slug":"arm-s-length","term":"Arm's length","url":"https://dealroom.so/glossary/arm-s-length"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"size-eligibility","term":"Size Eligibility","url":"https://dealroom.so/glossary/size-eligibility"}],"related_questions":[{"question":"What if my personal financial statement shows low liquid assets?","url":"https://dealroom.so/sba-loans/basics/what-if-my-personal-financial-statement-shows-low-liquid-assets"},{"question":"Are SBA 7(a) loans exclusively for businesses with financial difficulties?","url":"https://dealroom.so/sba-loans/basics/are-sba-7-a-loans-exclusively-for-businesses-with-financial-difficulties"},{"question":"What if my business is new and has no financial history?","url":"https://dealroom.so/sba-loans/basics/what-if-my-business-is-new-and-has-no-financial-history"},{"question":"Does misrepresenting financial information on the SBA application automatically kill approval?","url":"https://dealroom.so/sba-7a/questions/does-misrepresenting-financial-information-on-the-sba-application-automatically-kill-appro"},{"question":"How does my personal financial history affect SBA 7(a) loan approval?","url":"https://dealroom.so/sba-7a/questions/how-does-my-personal-financial-history-affect-sba-7-a-loan-approval"},{"question":"What specific financial documentation will I need to provide for my personal finances?","url":"https://dealroom.so/sba-7a/questions/what-specific-financial-documentation-will-i-need-to-provide-for-my-personal-finances"}]},"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 — Financial Interdependence","url":"https://dealroom.so/glossary/financial-interdependence","source_type":"DealRoom Data"}}