Glossary · Reading the business
In short
The SBA has a list of specific business types that are ineligible for 7(a) loans, regardless of size or other factors. This rule prevents federal funds from supporting certain activities.
Common ineligible businesses include those engaged in gambling, pyramid schemes, speculative activities, or passive investments. Before spending time on due diligence, cross-reference the target business's operations against the SBA's complete list of ineligible businesses. If it's on the list, the deal won't get SBA financing.
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.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
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