Glossary · Reading the business
In short
This means the buyer must be actively involved in the day-to-day operations of the business. The SBA wants owners who run their businesses, not just invest in them, to ensure loan repayment capacity.
For an SBA 7(a) loan, you must be an owner-operator. This means you can't just hire a manager and walk away; you need to be working at least 500 hours per year or 50% of the time, whichever is less. Your lender will verify your plans for active involvement, so be clear on your role.
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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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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