Glossary · People and paperwork
In short
This occurs when someone in a position of trust acts in their own best interest rather than the interest of another party, like a seller structuring terms to benefit themselves unfairly. The SBA strictly prohibits this in loan transactions.
The SBA is vigilant about "self-dealing" in all aspects of a 7(a) loan, especially with related parties. Any transactions, such as seller notes, leases, or asset valuations, must be justified as arm's-length to avoid impropriety and potential loan eligibility issues.
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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