{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-acquiring-leases-its-property-from-an-entity-i-also-own-not-the-s","api_url":"https://dealroom.so/api/public/questions/what-if-the-business-i-m-acquiring-leases-its-property-from-an-entity-i-also-own-not-the-s","question":"What if the business I'm acquiring leases its property from an entity I also own, not the seller?","topic":"Real estate","audience":"borrower","bot_mode":"buyer","short_answer":"If the business leases from an entity you own, the lease terms must be arm's-length, and the landlord entity will typically be required to guarantee the SBA loan.","rule":"For related-party leases, the lease terms (e.g., rent, term) must be reasonable and reflect market rates. The entity owning the real estate (your landlord entity) will be considered an affiliate of the operating business and will generally be required to sign a guaranty for the SBA loan.","example":"If you are acquiring a business and plan to lease its location from your existing LLC, 'My Properties LLC,' the lease must be at fair market value. 'My Properties LLC' would also need to guarantee the $800,000 SBA loan for the business acquisition.","what_lenders_check":"Lenders verify that related-party leases are structured fairly and do not unduly burden the operating business. They ensure the landlord entity guarantees the loan to prevent conflicts of interest and to secure any real estate collateral effectively.","required_facts":["Related-party lease","Arm's-length terms","Landlord entity ownership","Affiliation rules","Loan guaranty"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","Affiliation and Lending Criteria for SBA Business Loan Programs - Final Rule"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"},{"title":"Affiliation and Lending Criteria for SBA Business Loan Programs - Final Rule","url":"https://www.federalregister.gov/documents/2023/04/10/2023-07173/affiliation-and-lending-criteria-for-the-sba-business-loan-programs"}],"related_questions":[{"question":"Can I include the purchase of commercial real estate, where the business operates, within the same SBA 7(a) loan for a $2 million deal?","url":"https://dealroom.so/sba-7a/questions/can-i-include-the-purchase-of-commercial-real-estate-where-the-business-operates-within-th"},{"question":"What type of property appraisal is required if my $1.2 million SBA loan includes commercial real estate?","url":"https://dealroom.so/sba-7a/questions/what-type-of-property-appraisal-is-required-if-my-1-2-million-sba-loan-includes-commercial"},{"question":"Can I use an SBA 7(a) loan to purchase the real estate where the business operates?","url":"https://dealroom.so/sba-7a/questions/can-i-use-an-sba-7-a-loan-to-purchase-the-real-estate-where-the-business-operates"},{"question":"What happens if the business I am acquiring is located in a leased property?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-the-business-i-am-acquiring-is-located-in-a-leased-property"},{"question":"What kind of environmental due diligence is required if the business real estate is included in the loan?","url":"https://dealroom.so/sba-7a/questions/what-kind-of-environmental-due-diligence-is-required-if-the-business-real-estate-is-includ"},{"question":"Can an SBA 7(a) loan be used to buy a business that has environmental issues?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-used-to-buy-a-business-that-has-environmental-issues"}],"related_terms":[{"term":"Acquiring entity","url":"https://dealroom.so/glossary/acquiring-entity"},{"term":"Business Entity","url":"https://dealroom.so/glossary/business-entity"},{"term":"Indemnification from the Seller","url":"https://dealroom.so/glossary/indemnification-from-the-seller"},{"term":"Business Entity Structure","url":"https://dealroom.so/glossary/business-entity-structure"},{"term":"New Business Entity","url":"https://dealroom.so/glossary/new-business-entity"},{"term":"Tangible business property","url":"https://dealroom.so/glossary/tangible-business-property"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-acquiring-leases-its-property-from-an-entity-i-also-own-not-the-s","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}