Glossary · Doing the deal
Acquiring entity
In short
This is the legal structure (LLC, Corporation) you set up to purchase and own the business. It’s critical because it dictates liability and tax treatment.
What it means in a deal
Your acquiring entity will be the borrower on the SBA 7(a) loan. The SBA requires all owners of 20% or more of this entity to provide a Personal Guarantee. Carefully choose your entity type early with legal and tax advisors to avoid issues during closing.
Official sources
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.
Related terms
Common questions about Acquiring entity
- What if the business I'm acquiring leases its property from an entity owned by the seller?
- Are there specific requirements for the legal entity structure of the acquiring business for an SBA 7(a) loan?
- What if the business I'm acquiring leases its property from an entity I also own, not the seller?
- If the business I'm acquiring leases its property from an entity I also own, not the seller, how does this impact my 7(a) loan?
- What if the business I'm acquiring has *negative goodwill*?
- What are the key distinctions between cross-purchase and entity-purchase buy-sell agreements?
Defined by CapBench 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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