{"ok":true,"canonical_url":"https://dealroom.so/glossary/operational-control","api_url":"https://dealroom.so/api/public/glossary/operational-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":"operational-control","term":"Operational control","group":"People and paperwork","definition":"The ability to direct the day-to-day management and decision-making of a business. The SBA requires the buyer to have this, ensuring they are truly running the acquired business.","what_it_means":"The buyer must demonstrate they have the experience and intention to actively manage the business. Loan documents will reflect the buyer's full authority. Be wary of seller agreements that limit your operational control post-closing, as this can be an SBA eligibility issue.","url":"https://dealroom.so/glossary/operational-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":"undue-control","term":"Undue control","url":"https://dealroom.so/glossary/undue-control"},{"slug":"totality-of-the-circumstances-rule","term":"Totality of the circumstances rule","url":"https://dealroom.so/glossary/totality-of-the-circumstances-rule"},{"slug":"affiliation","term":"Affiliation","url":"https://dealroom.so/glossary/affiliation"},{"slug":"legal-entity","term":"Legal entity","url":"https://dealroom.so/glossary/legal-entity"}],"related_questions":[{"question":"What if a proposed franchise agreement includes a clause restricting the borrower's operational control or management?","url":"https://dealroom.so/for-lenders/questions/what-if-a-proposed-franchise-agreement-includes-a-clause-restricting-the-borrower-s-operat"},{"question":"What if the franchisor requires specific operational changes that impact the business's profitability?","url":"https://dealroom.so/sba-7a/questions/what-if-the-franchisor-requires-specific-operational-changes-that-impact-the-business-s-pr"},{"question":"Can an SBA 7(a) loan cover ongoing operational costs like rent or utilities?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-cover-ongoing-operational-costs-like-rent-or-utilities"},{"question":"Is working capital from an SBA loan available immediately at closing for operational expenses and payroll?","url":"https://dealroom.so/sba-7a/questions/is-working-capital-from-an-sba-loan-available-immediately-at-closing-for-operational-expen"},{"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":"If I am buying a business where I was previously an employee, does my operational experience count?","url":"https://dealroom.so/sba-7a/questions/if-i-am-buying-a-business-where-i-was-previously-an-employee-does-my-operational-experienc"}]},"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 — Operational control","url":"https://dealroom.so/glossary/operational-control","source_type":"DealRoom Data"}}