A HoldCo (holding company) is a parent entity that owns the equity of one or more operating businesses (OpCos) rather than trading directly itself. Buyers use a HoldCo to acquire and own a business, isolate liability, and, for those pursuing a roll-up, hold multiple companies under one umbrella.
A simple HoldCo structure
| Entity | Role |
|---|---|
| HoldCo LLC | You own this; it owns the OpCos |
| OpCo 1 (landscaping) | First acquisition |
| OpCo 2 (HVAC) | Second acquisition |
Note: SBA 7(a) rules limit some HoldCo/EPC structures, and each SBA loan generally requires its own guarantee, confirm eligibility before assuming a HoldCo will work for SBA financing.
Why it matters when buying a business
A HoldCo separates you personally from operating risk and creates a clean home for future acquisitions. But it interacts with SBA eligibility, the personal guarantee, and taxes in non-obvious ways. If you plan an ETA roll-up, design the HoldCo with your lender and attorney from deal one.
