Glossary · Reading the business
In short
This is a lease agreement where the rent and terms are consistent with what similar properties would command in the current market. It reflects a true arm's length transaction.
The SBA requires that any lease agreement related to the business, especially if it's with an affiliate of the seller or buyer, be at fair market value. Lenders will scrutinize leases to ensure the rent isn't artificially inflated or deflated, which could impact the business's cash flow for debt service.
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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