Glossary · Reading the business
In short
This is income generated from property rentals where the owner isn't actively involved in daily management. The SBA generally won't lend to businesses primarily generating this type of income.
The SBA 7(a) program is for active operating businesses, not passive investments. If the business you're buying has rental income, it must be incidental to an active enterprise, like renting out a portion of an owner-occupied building. Ensure the primary business activity meets the SBA's
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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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