Glossary · People and paperwork
Holding Company
In short
A holding company is a legal entity that owns shares of other companies but doesn't produce goods or services itself. It's often used for structuring ownership and managing multiple businesses.
What it means in a deal
You might establish a holding company to own the operating company you're acquiring, especially if you plan to acquire more businesses later. This can simplify ownership and liability structures. Discuss the optimal legal structure with your attorney.
Related terms
Common questions about Holding Company
- Can an SBA 7(a) loan be used to acquire a business that is primarily a holding company?
- Can an SBA 7(a) loan be used to purchase a business with a complex organizational structure, like a holding company?
- Can an SBA 7(a) loan be used to acquire a business that is primarily an investment or passive real estate holding company?
- How does a lender verify equity injection funds from a borrower's investment account holding illiquid assets?
- What are the risks for a lender holding the unguaranteed portion of an SBA 7(a) loan?
- Does the SBA permit a seller to retain a minority ownership stake while holding a standby note?
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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