{"ok":true,"canonical_url":"https://dealroom.so/glossary/limited-partner","api_url":"https://dealroom.so/api/public/glossary/limited-partner","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":"limited-partner","term":"Limited partner","group":"People and paperwork","definition":"An owner in a limited partnership who contributes capital but has no management authority and liability is limited to their investment. They are passive investors.","what_it_means":"If you're buying a business structured as a limited partnership and you intend to be actively involved, you'll likely need to become a general partner or move the entity to an LLC/Corporation. SBA loans require active owner-operators. Limited partners are typically passive investors, which doesn't fit the SBA's requirement for management and personal guarantees from owners.","url":"https://dealroom.so/glossary/limited-partner","official_sources":[],"related":[{"slug":"general-partner","term":"General partner","url":"https://dealroom.so/glossary/general-partner"},{"slug":"unlimited-liability","term":"Unlimited liability","url":"https://dealroom.so/glossary/unlimited-liability"},{"slug":"personal-liability","term":"Personal liability","url":"https://dealroom.so/glossary/personal-liability"},{"slug":"partnership","term":"Partnership","url":"https://dealroom.so/glossary/partnership"}],"related_questions":[{"question":"How does the SBA differentiate between a general partner and a limited partner for personal guaranty requirements?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-differentiate-between-a-general-partner-and-a-limited-partner-for-persona"},{"question":"How does the SBA handle a partner buyout where the remaining owner's experience is limited?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-handle-a-partner-buyout-where-the-remaining-owner-s-experience-is-limited"},{"question":"Can the personal guaranty be limited for certain passive investors or minority owners?","url":"https://dealroom.so/sba-7a/questions/can-the-personal-guaranty-be-limited-for-certain-passive-investors-or-minority-owners"},{"question":"What if the primary business assets are specialized machinery with limited resale value?","url":"https://dealroom.so/sba-7a/questions/what-if-the-primary-business-assets-are-specialized-machinery-with-limited-resale-value"},{"question":"What if the business I'm buying has limited tangible assets for collateral?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-buying-has-limited-tangible-assets-for-collateral"},{"question":"What if the business I'm acquiring is a startup with limited operating history?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-acquiring-is-a-startup-with-limited-operating-history"}]},"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 — Limited partner","url":"https://dealroom.so/glossary/limited-partner","source_type":"DealRoom Data"}}