{"ok":true,"canonical_url":"https://dealroom.so/glossary/related-parties","api_url":"https://dealroom.so/api/public/glossary/related-parties","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":"related-parties","term":"Related parties","group":"People and paperwork","definition":"Related parties are individuals or entities with a close relationship to the borrower or seller, such as family members or affiliated businesses. The SBA scrutinizes these relationships for potential conflicts.","what_it_means":"The SBA requires disclosure of all related parties involved in the loan transaction, including owners, management, and family members. Any transactions between related parties, like asset sales or loans, must be at arm's length and commercially reasonable to prevent fraud or unfair advantage. Be transparent to avoid delays.","url":"https://dealroom.so/glossary/related-parties","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":"arm-s-length","term":"Arm's length","url":"https://dealroom.so/glossary/arm-s-length"},{"slug":"conflicts-of-interest","term":"Conflicts of interest","url":"https://dealroom.so/glossary/conflicts-of-interest"},{"slug":"common-management","term":"Common management","url":"https://dealroom.so/glossary/common-management"},{"slug":"affiliation","term":"Affiliation","url":"https://dealroom.so/glossary/affiliation"}],"related_questions":[{"question":"What specific due diligence is required for a 7(a) loan involving a change of ownership between related parties?","url":"https://dealroom.so/for-lenders/questions/what-specific-due-diligence-is-required-for-a-7-a-loan-involving-a-change-of-ownership-bet"},{"question":"What specific additional due diligence is required for a 7(a) loan involving a change of ownership between related parties?","url":"https://dealroom.so/for-lenders/questions/what-specific-additional-due-diligence-is-required-for-a-7-a-loan-involving-a-change-of-ow"},{"question":"What constitutes an acceptable 'arm's length transaction' for a change of ownership between related parties for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-an-acceptable-arm-s-length-transaction-for-a-change-of-ownership-between-"},{"question":"Why does the SBA combine the size of related businesses when checking loan eligibility?","url":"https://dealroom.so/sba-loans/basics/why-does-the-sba-combine-the-size-of-related-businesses-when-checking-loan-eligibility"},{"question":"How does a lender prevent a guaranty denial related to undisclosed affiliations identified post-closing?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-prevent-a-guaranty-denial-related-to-undisclosed-affiliations-identified"},{"question":"When is an independent business valuation required for an SBA 7(a) acquisition, especially for related party transactions?","url":"https://dealroom.so/sba-7a/questions/when-is-an-independent-business-valuation-required-for-an-sba-7-a-acquisition-especially-f"}]},"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 — Related parties","url":"https://dealroom.so/glossary/related-parties","source_type":"DealRoom Data"}}