Glossary · The loan itself
In short
An investment where you're not actively managing the property. SBA 7(a) loans are for active operating businesses, not just holding real estate for rental income, so this is generally ineligible.
The SBA generally prohibits using 7(a) loan proceeds for passive investments. If the business you're buying owns real estate, the SBA wants to see that the real estate is essential to the business operations and actively used by the business, not merely held for appreciation or rental income from third parties. Your lender will scrutinize this.
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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