{"ok":true,"canonical_url":"https://dealroom.so/glossary/prohibited-transaction-rules","api_url":"https://dealroom.so/api/public/glossary/prohibited-transaction-rules","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":"prohibited-transaction-rules","term":"Prohibited Transaction Rules","group":"People and paperwork","definition":"These are IRS rules that prevent self-dealing and conflicts of interest when using retirement funds (like a ROBS) to invest in a business. They ensure the funds are used for the benefit of the retirement plan, not the individual.","what_it_means":"If you're using a ROBS (Rollover for Business Startups) for your equity injection, strict adherence to these rules is critical. Violations can lead to severe penalties, including taxes on the funds as an early distribution. Work with an experienced ROBS provider to ensure compliance.","url":"https://dealroom.so/glossary/prohibited-transaction-rules","official_sources":[],"related":[{"slug":"robs","term":"ROBS","url":"https://dealroom.so/glossary/robs"},{"slug":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"slug":"conflict-of-interest","term":"Conflict of interest","url":"https://dealroom.so/glossary/conflict-of-interest"}],"related_questions":[{"question":"What specific types of businesses are prohibited from getting an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-specific-types-of-businesses-are-prohibited-from-getting-an-sba-7-a-loan"},{"question":"Are there any specific business industries that are generally prohibited from getting an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/are-there-any-specific-business-industries-that-are-generally-prohibited-from-getting-an-s"},{"question":"If a seller note is on standby, is the seller prohibited from any post-sale employment with the business?","url":"https://dealroom.so/sba-7a/questions/if-a-seller-note-is-on-standby-is-the-seller-prohibited-from-any-post-sale-employment-with"},{"question":"What are the rules for using gifted family funds as equity?","url":"https://dealroom.so/sba-7a/questions/what-are-the-rules-for-using-gifted-family-funds-as-equity"},{"question":"Who actually lends the money in an SBA 7(a) loan transaction?","url":"https://dealroom.so/sba-loans/basics/who-actually-lends-the-money-in-an-sba-7-a-loan-transaction"},{"question":"If I use retirement account funds for equity, what are the rules?","url":"https://dealroom.so/sba-7a/questions/if-i-use-retirement-account-funds-for-equity-what-are-the-rules"}]},"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 — Prohibited Transaction Rules","url":"https://dealroom.so/glossary/prohibited-transaction-rules","source_type":"DealRoom Data"}}