Glossary · Doing the deal
In short
This describes a transaction where the buyer and seller have a pre-existing relationship, such as family members, business partners, or affiliated entities. The SBA scrutinizes these deals closely.
If you're buying a business from a family member or an entity you're already connected to, it's an identity of interest transaction. The SBA requires these deals to be conducted on an arm's length basis, meaning terms must be fair market value as if between unrelated parties. Expect enhanced due diligence and potentially stricter appraisal requirements to prevent conflicts of interest or inflated values.
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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