Glossary · Reading the business
In short
An active enterprise is a business engaged in ongoing commercial activity, providing goods or services. The SBA 7(a) loan program is exclusively for these types of businesses, not passive investments.
To qualify for a 7(a) loan, the business you're acquiring must clearly demonstrate it's an active enterprise with employees and regular operations. Businesses primarily generating passive income, like real estate holding companies, are generally ineligible. Your lender will verify the business's NAICS code and activities meet this requirement.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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