{"ok":true,"canonical_url":"https://dealroom.so/glossary/ineligible-activity","api_url":"https://dealroom.so/api/public/glossary/ineligible-activity","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":"ineligible-activity","term":"Ineligible activity","group":"The loan itself","definition":"Certain business types or activities that the SBA will not fund, such as passive investments or businesses engaged in illegal activities. If your target business has an ineligible activity, it won't qualify.","what_it_means":"The SBA has strict rules against funding businesses engaged in ineligible activities, including real estate investment, pyramid schemes, or certain financial speculation. During due diligence, verify that the target business does not conduct any of these activities, as an ineligible business cannot receive a 7(a) loan.","url":"https://dealroom.so/glossary/ineligible-activity","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"},{"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"}],"related":[{"slug":"eligibility-requirement","term":"Eligibility requirement","url":"https://dealroom.so/glossary/eligibility-requirement"},{"slug":"for-profit-business","term":"For-profit business","url":"https://dealroom.so/glossary/for-profit-business"},{"slug":"pyramid-scheme","term":"Pyramid Scheme","url":"https://dealroom.so/glossary/pyramid-scheme"},{"slug":"ineligible-businesses-rule","term":"Ineligible businesses rule","url":"https://dealroom.so/glossary/ineligible-businesses-rule"}],"related_questions":[{"question":"What constitutes an ineligible business for an SBA 7(a) loan based on activity?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-an-ineligible-business-for-an-sba-7-a-loan-based-on-activity"},{"question":"How does a lender determine if a borrower's business is engaged in a \"speculative\" activity and thus ineligible for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-determine-if-a-borrower-s-business-is-engaged-in-a-speculative-activity-"},{"question":"What are the consequences if the NAICS code entered into E-Tran differs from the primary business activity in the loan narrative?","url":"https://dealroom.so/for-lenders/questions/what-are-the-consequences-if-the-naics-code-entered-into-e-tran-differs-from-the-primary-b"},{"question":"What is the specific impact if the NAICS code entered into E-Tran differs from the primary business activity described in the loan narrative?","url":"https://dealroom.so/for-lenders/questions/what-is-the-specific-impact-if-the-naics-code-entered-into-e-tran-differs-from-the-primary"},{"question":"What makes a business ineligible for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-makes-a-business-ineligible-for-an-sba-7-a-loan"},{"question":"Are certain business types explicitly ineligible for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/are-certain-business-types-explicitly-ineligible-for-an-sba-7-a-loan"}]},"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 — Ineligible activity","url":"https://dealroom.so/glossary/ineligible-activity","source_type":"DealRoom Data"}}