Glossary · Reading the business
In short
Business activities primarily involving holding real estate for rent or investment, without significant operational involvement. The SBA generally won't guarantee loans for purely passive real estate.
If the business you're buying primarily generates revenue from renting out commercial properties rather than active operations, it may be ineligible for an SBA 7(a) loan. The SBA's policy focuses on supporting active operating businesses, not just real estate investments. Ensure the business has a clear operating purpose.
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.
Pressure-test the numbers before you make an offer
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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