{"ok":true,"canonical_url":"https://dealroom.so/glossary/ineligible-business","api_url":"https://dealroom.so/api/public/glossary/ineligible-business","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-business","term":"Ineligible business","group":"The loan itself","definition":"A type of business that the SBA will not provide a loan guarantee for, due to specific rules or restrictions. Buyers care because trying to acquire an ineligible business with an SBA loan is a non-starter, wasting your time and resources.","what_it_means":"The SBA has clear rules on what types of businesses are ineligible, such as passive real estate investments, pyramid schemes, or those engaged in illegal activities. Before you get too deep, verify the target business's NAICS code and operations against SBA eligibility criteria. Your lender will perform this check early in the process.","url":"https://dealroom.so/glossary/ineligible-business","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":"naics-code","term":"NAICS code","url":"https://dealroom.so/glossary/naics-code"},{"slug":"7a-loan","term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"},{"slug":"franchise-unit","term":"Franchise unit","url":"https://dealroom.so/glossary/franchise-unit"},{"slug":"pyramid-scheme","term":"Pyramid Scheme","url":"https://dealroom.so/glossary/pyramid-scheme"}],"related_questions":[{"question":"Which types of businesses are typically ineligible for SBA 7(a) financing?","url":"https://dealroom.so/sba-loans/basics/which-types-of-businesses-are-typically-ineligible-for-sba-7-a-financing"},{"question":"What kind of businesses are generally ineligible for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-kind-of-businesses-are-generally-ineligible-for-an-sba-7-a-loan"},{"question":"What types of businesses are generally ineligible for an SBA 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-types-of-businesses-are-generally-ineligible-for-an-sba-7-a-loan"},{"question":"Are there specific types of businesses that are ineligible for an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/are-there-specific-types-of-businesses-that-are-ineligible-for-an-sba-7-a-loan"},{"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 there specific types of businesses or industries that are ineligible for SBA 7(a) loans?","url":"https://dealroom.so/sba-7a/questions/are-there-specific-types-of-businesses-or-industries-that-are-ineligible-for-sba-7-a-loans"}]},"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 business","url":"https://dealroom.so/glossary/ineligible-business","source_type":"DealRoom Data"}}