Glossary · Reading the business
In short
This is a separate legal entity that owns the real estate used by an operating business. The operating company then leases the property from the REHCO.
In a 7(a) deal involving real estate, you might buy the operating company and lease the real estate from a separate entity owned by the seller. The SBA prefers the operating company to own the real estate if possible, or for the buyer to purchase both entities. If not, the lease terms are crucial.
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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