{"ok":true,"canonical_url":"https://dealroom.so/glossary/identity-of-interest-transaction","api_url":"https://dealroom.so/api/public/glossary/identity-of-interest-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":"identity-of-interest-transaction","term":"Identity of Interest Transaction","group":"Doing the deal","definition":"This describes a transaction where the buyer and seller have a pre-existing relationship, such as family members, business partners, or affiliated entities. The SBA scrutinizes these deals closely.","what_it_means":"If you're buying a business from a family member or an entity you're already connected to, it's an identity of interest transaction. The SBA requires these deals to be conducted on an arm's length basis, meaning terms must be fair market value as if between unrelated parties. Expect enhanced due diligence and potentially stricter appraisal requirements to prevent conflicts of interest or inflated values.","url":"https://dealroom.so/glossary/identity-of-interest-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":"arm-s-length","term":"Arm's length","url":"https://dealroom.so/glossary/arm-s-length"},{"slug":"affiliation","term":"Affiliation","url":"https://dealroom.so/glossary/affiliation"},{"slug":"business-valuation","term":"Business valuation","url":"https://dealroom.so/glossary/business-valuation"}],"related_questions":[{"question":"When does identity of interest trigger affiliation for size determination under SBA rules?","url":"https://dealroom.so/for-lenders/questions/when-does-identity-of-interest-trigger-affiliation-for-size-determination-under-sba-rules"},{"question":"What specific criteria determine if two businesses are affiliated due to 'identity of interest' for size standards?","url":"https://dealroom.so/for-lenders/questions/what-specific-criteria-determine-if-two-businesses-are-affiliated-due-to-identity-of-inter"},{"question":"When does a 'close family relationship' between owners of separate businesses trigger identity of interest affiliation for SBA 7(a) loans?","url":"https://dealroom.so/for-lenders/questions/when-does-a-close-family-relationship-between-owners-of-separate-businesses-trigger-identi"},{"question":"How does the SBA evaluate the reasonableness of goodwill in a 7(a) change-of-ownership transaction?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-evaluate-the-reasonableness-of-goodwill-in-a-7-a-change-of-ownership-tran"},{"question":"When is a business valuation required for a change of ownership transaction exceeding $500,000?","url":"https://dealroom.so/for-lenders/questions/when-is-a-business-valuation-required-for-a-change-of-ownership-transaction-exceeding-500-"},{"question":"When is a business appraisal required for a change of ownership transaction exceeding $500,000?","url":"https://dealroom.so/for-lenders/questions/when-is-a-business-appraisal-required-for-a-change-of-ownership-transaction-exceeding-500-"}]},"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 — Identity of Interest Transaction","url":"https://dealroom.so/glossary/identity-of-interest-transaction","source_type":"DealRoom Data"}}