Glossary · Doing the deal
New Business Entity
In short
The legal structure you create (e.g., LLC, Corporation) to purchase and operate the business. This entity will be the borrower on your SBA loan.
What it means in a deal
For an asset purchase, you'll almost always form a new business entity to acquire the assets of the existing business. This protects your personal assets and simplifies the transaction. This entity will be the legal borrower and will sign all loan documents, including the note and security agreements, and operate the business post-acquisition.
Related terms
Common questions about New Business Entity
- Are there specific requirements for the business entity structure for an SBA 7(a) loan?
- Can a non-profit entity apply for an SBA 7(a) loan for business expansion purposes?
- What if the acquired business changes its legal entity structure after the SBA loan is approved?
- What if my business is new and has no financial history?
- Does my business have to be a specific legal entity type for an SBA 7(a) loan?
- What if the business I'm acquiring leases its property from an entity owned by the seller?
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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