{"ok":true,"canonical_url":"https://dealroom.so/glossary/principal-individual","api_url":"https://dealroom.so/api/public/glossary/principal-individual","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":"principal-individual","term":"Principal (Individual)","group":"People and paperwork","definition":"Any individual owning 20% or more of the business, or who holds a key management role. These individuals are heavily scrutinized by the SBA due to their influence and required personal guarantees.","what_it_means":"For an SBA 7(a) loan, all Principals must complete SBA Form 1919 and undergo character and credit checks. They are also required to provide a Personal Guarantee for the loan, putting their personal assets at risk. Understand that this extends beyond just equity owners to key managers.","url":"https://dealroom.so/glossary/principal-individual","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":"ownership-share","term":"Ownership Share","url":"https://dealroom.so/glossary/ownership-share"},{"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":"key-principal","term":"Key principal","url":"https://dealroom.so/glossary/key-principal"}],"related_questions":[{"question":"Does a partner buyout require 100% ownership by the acquiring individual?","url":"https://dealroom.so/sba-7a/questions/does-a-partner-buyout-require-100-ownership-by-the-acquiring-individual"},{"question":"What is the maximum ownership percentage for an individual to avoid personal guaranty?","url":"https://dealroom.so/for-lenders/questions/what-is-the-maximum-ownership-percentage-for-an-individual-to-avoid-personal-guaranty"},{"question":"If multiple owners each guarantee the loan, are their liabilities typically joint and several or individual?","url":"https://dealroom.so/sba-7a/questions/if-multiple-owners-each-guarantee-the-loan-are-their-liabilities-typically-joint-and-sever"},{"question":"What is the maximum amount an individual can personally guarantee for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-is-the-maximum-amount-an-individual-can-personally-guarantee-for-an-sba-7-a-loan"},{"question":"What documentation is required if a gift for equity injection comes from an entity, not an individual?","url":"https://dealroom.so/sba-7a/questions/what-documentation-is-required-if-a-gift-for-equity-injection-comes-from-an-entity-not-an-"},{"question":"Can a corporate entity, not an individual, provide a gift that counts towards my equity injection for an SBA loan?","url":"https://dealroom.so/sba-7a/questions/can-a-corporate-entity-not-an-individual-provide-a-gift-that-counts-towards-my-equity-inje"}]},"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 — Principal (Individual)","url":"https://dealroom.so/glossary/principal-individual","source_type":"DealRoom Data"}}