Glossary · People and paperwork
In short
A company that exists legally but has no significant assets, operations, or employees. It's often used for financial maneuvering or to obscure ownership.
The SBA has strict rules against using 7(a) loans for businesses that are merely shell companies. Your target business must be an operating concern with demonstrable assets, employees, and revenue-generating activities to qualify. Lenders will verify this during underwriting.
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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