{"ok":true,"canonical_url":"https://dealroom.so/glossary/key-principal","api_url":"https://dealroom.so/api/public/glossary/key-principal","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-principal","term":"Key principal","group":"People and paperwork","definition":"Any individual who owns 20% or more of the business, or holds a position of significant influence or control.","what_it_means":"This includes owners, officers, directors, or anyone else with substantial management authority. The SBA requires all key principals to provide personal financial information, undergo credit checks, and typically sign a personal guarantee for the loan. Their character and financial health are critical to loan approval.","url":"https://dealroom.so/glossary/key-principal","official_sources":[{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"},{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"personal-guarantee","term":"Personal guarantee","url":"https://dealroom.so/glossary/personal-guarantee"},{"slug":"form-1919","term":"Form 1919","url":"https://dealroom.so/glossary/form-1919"},{"slug":"good-character","term":"Good character","url":"https://dealroom.so/glossary/good-character"}],"related_questions":[{"question":"When is a lender *not* required to obtain life insurance on a key principal for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/when-is-a-lender-not-required-to-obtain-life-insurance-on-a-key-principal-for-a-7-a-loan"},{"question":"When is a collateral assignment of life insurance on a key principal mandatory for an SBA 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/when-is-a-collateral-assignment-of-life-insurance-on-a-key-principal-mandatory-for-an-sba-"},{"question":"Are there specific requirements for the type of life insurance policy needed for a collateral assignment on a key principal?","url":"https://dealroom.so/sba-7a/questions/are-there-specific-requirements-for-the-type-of-life-insurance-policy-needed-for-a-collate"},{"question":"Under what circumstances can a lender waive the life insurance requirement for a 7(a) loan on a key principal?","url":"https://dealroom.so/for-lenders/questions/under-what-circumstances-can-a-lender-waive-the-life-insurance-requirement-for-a-7-a-loan-"},{"question":"How should a lender structure the beneficiary and assignment of life insurance on a key principal for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/how-should-a-lender-structure-the-beneficiary-and-assignment-of-life-insurance-on-a-key-pr"},{"question":"Under what specific circumstances can a lender waive the life insurance requirement for a key principal on a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/under-what-specific-circumstances-can-a-lender-waive-the-life-insurance-requirement-for-a-"}]},"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 principal","url":"https://dealroom.so/glossary/key-principal","source_type":"DealRoom Data"}}