Glossary · The loan itself
In short
An SBA rule requiring that the buyer, as the new owner, actively manage and operate the business financed by the 7(a) loan. This prevents passive investments.
This means you must be involved in the day-to-day operations and hold at least 51% ownership, or a significant minority if you're part of a management team that collectively owns 51%. The SBA wants to ensure you're committed to the business's success.
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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