Glossary · The loan itself
In short
This describes business operations where the owner does not materially participate, such as simply owning rental property. SBA loans are generally not permitted for such activities.
Similar to passive investment, the SBA requires active owner involvement. If the business you're acquiring is primarily a landlord operation or relies solely on passive income streams without active management, it won't qualify for a 7(a) loan. You must show you're taking on an active management 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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