{"ok":true,"canonical_url":"https://dealroom.so/glossary/ineligible-businesses-rule","api_url":"https://dealroom.so/api/public/glossary/ineligible-businesses-rule","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-businesses-rule","term":"Ineligible businesses rule","group":"Reading the business","definition":"The SBA has a list of specific business types that are ineligible for 7(a) loans, regardless of size or other factors. This rule prevents federal funds from supporting certain activities.","what_it_means":"Common ineligible businesses include those engaged in gambling, pyramid schemes, speculative activities, or passive investments. Before spending time on due diligence, cross-reference the target business's operations against the SBA's complete list of ineligible businesses. If it's on the list, the deal won't get SBA financing.","url":"https://dealroom.so/glossary/ineligible-businesses-rule","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":"not-engaged-in-lending-rule","term":"Not engaged in lending rule","url":"https://dealroom.so/glossary/not-engaged-in-lending-rule"},{"slug":"naics-code","term":"NAICS code","url":"https://dealroom.so/glossary/naics-code"},{"slug":"non-profit-organization","term":"Non-profit organization","url":"https://dealroom.so/glossary/non-profit-organization"},{"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":"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"},{"question":"Are there specific types of businesses that are generally ineligible for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/are-there-specific-types-of-businesses-that-are-generally-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 businesses rule","url":"https://dealroom.so/glossary/ineligible-businesses-rule","source_type":"DealRoom Data"}}