{"ok":true,"canonical_url":"https://dealroom.so/glossary/operating-company","api_url":"https://dealroom.so/api/public/glossary/operating-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":"operating-company","term":"Operating Company","group":"Reading the business","definition":"This is the active business entity that conducts day-to-day operations, generates revenue, and employs staff. It's the core business you intend to acquire.","what_it_means":"Most SBA 7(a) acquisitions focus on buying the operating company. If there's a separate Real Estate Holding Company, you'll need to understand the relationship and how both entities will be acquired or leased. Ensure the operating company has a strong, identifiable asset base for collateral.","url":"https://dealroom.so/glossary/operating-company","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":"real-estate-holding-company","term":"Real Estate Holding Company","url":"https://dealroom.so/glossary/real-estate-holding-company"},{"slug":"asset-purchase","term":"Asset purchase","url":"https://dealroom.so/glossary/asset-purchase"},{"slug":"stock-purchase","term":"Stock purchase","url":"https://dealroom.so/glossary/stock-purchase"},{"slug":"goodwill","term":"Goodwill","url":"https://dealroom.so/glossary/goodwill"}],"related_questions":[{"question":"What happens if my business real estate is owned separately from my operating company?","url":"https://dealroom.so/sba-loans/basics/what-happens-if-my-business-real-estate-is-owned-separately-from-my-operating-company"},{"question":"What happens if the business real estate is held in a separate entity owned by the buyer, not the operating company?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-the-business-real-estate-is-held-in-a-separate-entity-owned-by-the-buyer-n"},{"question":"If the business real estate is in a separate entity, what documentation is needed to link it to the operating company?","url":"https://dealroom.so/sba-7a/questions/if-the-business-real-estate-is-in-a-separate-entity-what-documentation-is-needed-to-link-i"},{"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"}]},"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 — Operating Company","url":"https://dealroom.so/glossary/operating-company","source_type":"DealRoom Data"}}