Glossary · People and paperwork
Management company
In short
A separate entity providing management services to a business, common in franchises or for absentee owners. Understand its impact on the business.
What it means in a deal
If the business you're buying uses a management company, you need to understand its role, the terms of its contract, and how it impacts the business's profitability (EBITDA/SDE). The SBA has rules around "common management" and "affiliation" that can impact loan eligibility. You'll likely need to terminate or restructure these agreements upon acquisition if you plan to be owner-operator.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Management company
- How does the SBA determine "common control" when assessing affiliation for a management company providing services?
- Are business life insurance premiums generally tax deductible for the company?
- Can an SBA 7(a) loan help me acquire another company?
- What distinguishes a company redemption from a cross-purchase buyout for SBA?
- Does my business need to be a for-profit company to qualify?
- How does the SBA verify my business management experience?
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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