{"ok":true,"canonical_url":"https://dealroom.so/glossary/majority-equity-stake","api_url":"https://dealroom.so/api/public/glossary/majority-equity-stake","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":"majority-equity-stake","term":"Majority equity stake","group":"Your money in the deal","definition":"Owning more than 50% of a company's shares or ownership interests, giving the holder controlling interest and decision-making power. This is typically required for SBA borrowers.","what_it_means":"The SBA typically requires the buyer to hold a majority equity stake (51% or more) in the acquired business. This ensures the borrower has control and aligns with the owner-operator principle. If multiple buyers are involved, their combined ownership must meet this threshold, and all owners with 20% or more must personally guarantee the loan.","url":"https://dealroom.so/glossary/majority-equity-stake","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":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"slug":"key-principal","term":"Key principal","url":"https://dealroom.so/glossary/key-principal"},{"slug":"personal-guarantee","term":"Personal guarantee","url":"https://dealroom.so/glossary/personal-guarantee"},{"slug":"affiliation","term":"Affiliation","url":"https://dealroom.so/glossary/affiliation"}],"related_questions":[{"question":"Can an SBA 7(a) loan be used to purchase a majority stake in a business, not 100%?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-be-used-to-purchase-a-majority-stake-in-a-business-not-100"},{"question":"Can I use an SBA 7(a) loan to buy out a business partner who holds a majority stake?","url":"https://dealroom.so/sba-7a/questions/can-i-use-an-sba-7-a-loan-to-buy-out-a-business-partner-who-holds-a-majority-stake"},{"question":"Can an SBA 7(a) loan be used to purchase a majority stake, but not 100%, of a business?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-used-to-purchase-a-majority-stake-but-not-100-of-a-business"},{"question":"Can an SBA 7(a) loan finance the purchase of a majority stake, like 75%, in a business instead of 100%?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-finance-the-purchase-of-a-majority-stake-like-75-in-a-business-instead"},{"question":"Can I use an SBA 7(a) loan to finance the purchase of a majority stake, but not 100%, of a business?","url":"https://dealroom.so/sba-7a/questions/can-i-use-an-sba-7-a-loan-to-finance-the-purchase-of-a-majority-stake-but-not-100-of-a-bus"},{"question":"When can a minority equity stake still create affiliation for size purposes?","url":"https://dealroom.so/for-lenders/questions/when-can-a-minority-equity-stake-still-create-affiliation-for-size-purposes"}]},"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 — Majority equity stake","url":"https://dealroom.so/glossary/majority-equity-stake","source_type":"DealRoom Data"}}