Glossary · The loan itself
In short
A business model where participants sell products and also earn commissions from sales made by people they recruit. While often legal, the SBA has specific rules for financing them.
The SBA can finance an MLM if its primary revenue comes from product sales to end-users, not just recruitment. Lenders will examine the compensation plan to ensure it's not a pyramid scheme in disguise. Understand the SBA's 'not engaged in lending' rule and 'ineligible businesses rule' when considering an MLM.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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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