SBA 7(a) Q&A
Short answer
If the business leases from an entity you own, the lease terms must be arm's-length, and the landlord entity will typically be required to guarantee the SBA loan.
For related-party leases, the lease terms (e.g., rent, term) must be reasonable and reflect market rates. The entity owning the real estate (your landlord entity) will be considered an affiliate of the operating business and will generally be required to sign a guaranty for the SBA loan.
If you are acquiring a business and plan to lease its location from your existing LLC, 'My Properties LLC,' the lease must be at fair market value. 'My Properties LLC' would also need to guarantee the $800,000 SBA loan for the business acquisition.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Affiliation and Lending Criteria for SBA Business Loan Programs - Final Rule
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. 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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