Glossary · People and paperwork
License
In short
A legal permission from a government authority or private entity to operate a business, practice a profession, or use intellectual property. It's crucial for legal operation and often a condition for your loan.
What it means in a deal
Before closing, you must confirm that the business holds all necessary licenses and permits, and that they are transferable to you or that you can easily obtain new ones. Your lender will require proof of proper licensing for you and the business as part of the closing process.
Related terms
Common questions about License
- How does the SBA determine affiliation for businesses operating under a license agreement?
- Can a professional license or intellectual property I developed be valued and count towards the 10% equity?
- How does the "franchise rule" specifically apply to determine affiliation for an independent dealer or licensee model?
- Are specific certifications or licenses required for my industry for SBA 7(a) loan approval?
- Are there specific certifications or licenses required for my industry for SBA 7(a) loan approval?
- What if my business operates in a highly regulated industry, like childcare or medical services, requiring specific licenses?
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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