SBA 7(a) Q&A
Short answer
If the real estate is not being acquired, the SBA requires a long-term lease (at least equal to the loan term) between the acquired business and the separate real estate entity, with specific terms to protect the business.
When the operating business leases its premises from a separate entity controlled by the seller (and the real estate is not part of the acquisition), the SBA requires a strong lease agreement. This lease must be long-term, ideally matching the SBA loan term, to ensure the business's stability. Key terms often include a fair market rent, no early termination clauses detrimental to the business, and potentially a landlord subordination agreement.
You acquire a business with a 10-year SBA loan. The seller's separate entity owns the building. The lender will require a new 10-year lease for the business at a fair market rate, ensuring stable occupancy for the life of the loan.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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