Glossary · Doing the deal
In short
A lease negotiated independently between two unrelated parties, ensuring fair market terms without preferential treatment. Buyers care because the SBA requires this if you're leasing property from the seller or a related entity, ensuring the rent is legitimate and market-based.
If the seller (or an affiliate) will be your landlord post-acquisition, the SBA mandates an arm's-length lease. This means the rent must be at fair market value, supported by an appraisal or market analysis, and the lease terms cannot be overly favorable to either party. Your lender will scrutinize this.
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.
Line up financing while you're under LOI
Tell us the business, the price, and your timeline — we'll match you with lenders who close deals like yours and flag anything that stalls the process.
Free · No documents · Usually same-day