{"ok":true,"canonical_url":"https://dealroom.so/glossary/key-employee","api_url":"https://dealroom.so/api/public/glossary/key-employee","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"key-employee","term":"Key employee","group":"Reading the business","definition":"An employee whose expertise, relationships, or performance is critical to the business's ongoing success. A buyer needs to identify these individuals to understand potential operational risks post-acquisition.","what_it_means":"In your due diligence, identify who the key employees are beyond the owner. Assess their roles, compensation, and likelihood of staying after the sale. Losing a key employee can significantly impact revenue and operations, so plan for retention or replacement.","url":"https://dealroom.so/glossary/key-employee","official_sources":[],"related":[{"slug":"non-compete","term":"Non-compete","url":"https://dealroom.so/glossary/non-compete"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"non-recurring-event","term":"Non-recurring event","url":"https://dealroom.so/glossary/non-recurring-event"},{"slug":"customer-concentration-analysis","term":"Customer concentration analysis","url":"https://dealroom.so/glossary/customer-concentration-analysis"}],"related_questions":[{"question":"If a key non-owner employee is a foreign national, does this affect loan eligibility?","url":"https://dealroom.so/for-lenders/questions/if-a-key-non-owner-employee-is-a-foreign-national-does-this-affect-loan-eligibility"},{"question":"What if the seller of a business remains a key employee after closing for a critical transition period?","url":"https://dealroom.so/for-lenders/questions/what-if-the-seller-of-a-business-remains-a-key-employee-after-closing-for-a-critical-trans"},{"question":"Beyond common officers/directors, how does a lender assess affiliation through \"shared key employee functions\" for SBA size standards?","url":"https://dealroom.so/for-lenders/questions/beyond-common-officers-directors-how-does-a-lender-assess-affiliation-through-shared-key-e"},{"question":"When can a lender require a collateral assignment of life insurance for a 7(a) loan on a non-owner key employee?","url":"https://dealroom.so/for-lenders/questions/when-can-a-lender-require-a-collateral-assignment-of-life-insurance-for-a-7-a-loan-on-a-no"},{"question":"If a key management employee who is not an owner is a foreign national, does this affect SBA 7(a) loan eligibility?","url":"https://dealroom.so/for-lenders/questions/if-a-key-management-employee-who-is-not-an-owner-is-a-foreign-national-does-this-affect-sb"},{"question":"If key employees resign during due diligence, could this kill the SBA loan approval?","url":"https://dealroom.so/sba-7a/questions/if-key-employees-resign-during-due-diligence-could-this-kill-the-sba-loan-approval"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Key employee","url":"https://dealroom.so/glossary/key-employee","source_type":"DealRoom Data"}}