{"ok":true,"canonical_url":"https://dealroom.so/glossary/managerial-control","api_url":"https://dealroom.so/api/public/glossary/managerial-control","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":"managerial-control","term":"Managerial Control","group":"People and paperwork","definition":"The power to direct the day-to-day operations and strategic decisions of a business. The SBA requires that the borrower, usually the buyer, has managerial control.","what_it_means":"For a 7(a) loan, the buyer must demonstrate they will actively manage the business. This means the seller cannot retain significant decision-making authority after closing. Ensure your purchase agreement and related documents clearly transfer full managerial control to you.","url":"https://dealroom.so/glossary/managerial-control","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":"retained-control","term":"Retained Control","url":"https://dealroom.so/glossary/retained-control"},{"slug":"executive-authority","term":"Executive Authority","url":"https://dealroom.so/glossary/executive-authority"},{"slug":"management-authority","term":"Management Authority","url":"https://dealroom.so/glossary/management-authority"},{"slug":"seller-consulting-agreement","term":"Seller Consulting Agreement","url":"https://dealroom.so/glossary/seller-consulting-agreement"}],"related_questions":[{"question":"How does the SBA define 'total control' rule to determine affiliation for size standards?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-define-total-control-rule-to-determine-affiliation-for-size-standards"},{"question":"What is the definition of \"control\" for affiliation purposes in a 7(a) loan application?","url":"https://dealroom.so/for-lenders/questions/what-is-the-definition-of-control-for-affiliation-purposes-in-a-7-a-loan-application"},{"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":"How does the \"control\" principle trigger affiliation for purposes of determining a business's size standard?","url":"https://dealroom.so/for-lenders/questions/how-does-the-control-principle-trigger-affiliation-for-purposes-of-determining-a-business-"},{"question":"How does the SBA evaluate a franchise agreement not on the directory for acceptable franchisor control provisions?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-evaluate-a-franchise-agreement-not-on-the-directory-for-acceptable-franch"},{"question":"What issues in a franchise agreement typically lead to a determination of 'undue control' by the franchisor?","url":"https://dealroom.so/for-lenders/questions/what-issues-in-a-franchise-agreement-typically-lead-to-a-determination-of-undue-control-by"}]},"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 — Managerial Control","url":"https://dealroom.so/glossary/managerial-control","source_type":"DealRoom Data"}}