Glossary · People and paperwork
In short
When a seller or other party maintains too much influence over a business after a sale, which can be an SBA eligibility issue. The SBA requires the buyer to have full operational control.
This often arises with seller notes or consulting agreements where the seller's terms are so restrictive they effectively still run the business. The SBA scrutinizes these arrangements to ensure the buyer is truly independent. Structure any post-sale seller involvement carefully to avoid 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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