SBA 7(a) Q&A
Short answer
This is permissible, but the SBA lender will require a new, arm's-length lease agreement with fair market terms for the acquiring business.
The SBA permits a seller-owned entity to continue leasing property to the acquired business. However, the lease must be on commercially reasonable, arm's-length terms, meaning the rent and conditions must reflect market rates, not preferential terms due to prior ownership. An appraisal of the real estate may be required to verify market rent.
A buyer acquires a business that leases its space from the seller's separate real estate LLC. The lender will require a new lease agreement between the buyer's new business entity and the seller's LLC, ensuring the rent ($5,000/month) is at fair market value.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
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.
More on real estate
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day