{"ok":true,"canonical_url":"https://dealroom.so/glossary/management-company","api_url":"https://dealroom.so/api/public/glossary/management-company","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":"management-company","term":"Management company","group":"People and paperwork","definition":"A separate entity providing management services to a business, common in franchises or for absentee owners. Understand its impact on the business.","what_it_means":"If the business you're buying uses a management company, you need to understand its role, the terms of its contract, and how it impacts the business's profitability (EBITDA/SDE). The SBA has rules around \"common management\" and \"affiliation\" that can impact loan eligibility. You'll likely need to terminate or restructure these agreements upon acquisition if you plan to be owner-operator.","url":"https://dealroom.so/glossary/management-company","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":"franchise","term":"Franchise","url":"https://dealroom.so/glossary/franchise"},{"slug":"common-management","term":"Common management","url":"https://dealroom.so/glossary/common-management"},{"slug":"ebitda","term":"EBITDA","url":"https://dealroom.so/glossary/ebitda"}],"related_questions":[{"question":"How does the SBA determine \"common control\" when assessing affiliation for a management company providing services?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-determine-common-control-when-assessing-affiliation-for-a-management-comp"},{"question":"Are business life insurance premiums generally tax deductible for the company?","url":"https://dealroom.so/sba-7a/questions/are-business-life-insurance-premiums-generally-tax-deductible-for-the-company"},{"question":"Can an SBA 7(a) loan help me acquire another company?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-help-me-acquire-another-company"},{"question":"What distinguishes a company redemption from a cross-purchase buyout for SBA?","url":"https://dealroom.so/sba-7a/questions/what-distinguishes-a-company-redemption-from-a-cross-purchase-buyout-for-sba"},{"question":"Does my business need to be a for-profit company to qualify?","url":"https://dealroom.so/sba-loans/basics/does-my-business-need-to-be-a-for-profit-company-to-qualify"},{"question":"How does the SBA verify my business management experience?","url":"https://dealroom.so/sba-loans/basics/how-does-the-sba-verify-my-business-management-experience"}]},"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 — Management company","url":"https://dealroom.so/glossary/management-company","source_type":"DealRoom Data"}}