{"ok":true,"canonical_url":"https://dealroom.so/glossary/minority-ownership","api_url":"https://dealroom.so/api/public/glossary/minority-ownership","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":"minority-ownership","term":"Minority Ownership","group":"Reading the business","definition":"This means owning less than 50% of a business. It's crucial because an SBA loan requires individuals or entities with 20% or more ownership to personally guarantee the loan.","what_it_means":"As a buyer, if you have a partner who will own less than 20%, they generally won't be required to provide a personal guarantee. However, if they own 20% or more, they must sign on as a guarantor. Understand your partners' equity positions.","url":"https://dealroom.so/glossary/minority-ownership","official_sources":[{"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"},{"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"}],"related":[{"slug":"personal-guarantee","term":"Personal guarantee","url":"https://dealroom.so/glossary/personal-guarantee"},{"slug":"equity-position","term":"Equity Position","url":"https://dealroom.so/glossary/equity-position"},{"slug":"legal-entity-structure","term":"Legal Entity Structure","url":"https://dealroom.so/glossary/legal-entity-structure"}],"related_questions":[{"question":"Does the SBA permit a seller to retain a minority ownership stake while holding a standby note?","url":"https://dealroom.so/sba-7a/questions/does-the-sba-permit-a-seller-to-retain-a-minority-ownership-stake-while-holding-a-standby-"},{"question":"Can an SBA 7(a) loan be used to buy out a minority partner with less than 20% ownership?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-used-to-buy-out-a-minority-partner-with-less-than-20-ownership"},{"question":"What is required if the seller in a change-of-ownership 7(a) loan transaction retains a minority equity stake?","url":"https://dealroom.so/for-lenders/questions/what-is-required-if-the-seller-in-a-change-of-ownership-7-a-loan-transaction-retains-a-min"},{"question":"Can an SBA 7(a) loan be used to purchase a business if the seller will retain a minority ownership stake?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-used-to-purchase-a-business-if-the-seller-will-retain-a-minority-ow"},{"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"},{"question":"When does a minority equity stake still create affiliation for size purposes?","url":"https://dealroom.so/for-lenders/questions/when-does-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 — Minority Ownership","url":"https://dealroom.so/glossary/minority-ownership","source_type":"DealRoom Data"}}