Glossary · Reading the business
In short
An SBA eligibility requirement stating that a business, to be eligible for an SBA loan, must not be controlled by another entity that itself is not eligible. This often applies to franchisors or other affiliates.
This rule is critical for franchise acquisitions. It ensures the borrower has actual control over the business, not an ineligible third party like a franchisor. The SBA will scrutinize your franchise agreement to confirm you have independent decision-making authority, especially regarding management and operations, to avoid any "negative control" by the franchisor or other affiliates.
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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