Glossary · The loan itself
In short
An eligibility issue means the business or borrower doesn't meet SBA's rules for a 7(a) loan. If discovered later, the SBA can deny its guaranty, leaving you solely responsible for the full loan.
Lenders are responsible for verifying all SBA eligibility requirements before closing. However, if a problem is found post-closing, the SBA can deny its guaranty. Your due diligence should include a thorough review of the business's and seller's compliance with SBA size standards, industry restrictions, and character requirements.
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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