{"ok":true,"canonical_url":"https://dealroom.so/glossary/retained-seller-interest","api_url":"https://dealroom.so/api/public/glossary/retained-seller-interest","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":"retained-seller-interest","term":"Retained Seller Interest","group":"Your money in the deal","definition":"This occurs when the seller retains some ownership (equity) in the business after the sale. The SBA has strict limits on this to ensure the buyer has full control and is genuinely buying the business.","what_it_means":"If a seller retains equity, it typically cannot exceed 10-20% and must be structured as a passive investment, subject to the SBA's Total Control Rule. Any retained interest must not give the seller control or preferential rights, and often needs to be on full standby, junior to the SBA loan.","url":"https://dealroom.so/glossary/retained-seller-interest","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":"seller-note","term":"Seller note","url":"https://dealroom.so/glossary/seller-note"},{"slug":"standby","term":"Standby","url":"https://dealroom.so/glossary/standby"},{"slug":"full-standby-agreement","term":"Full Standby Agreement","url":"https://dealroom.so/glossary/full-standby-agreement"},{"slug":"total-control-rule","term":"Total Control Rule","url":"https://dealroom.so/glossary/total-control-rule"}],"related_questions":[{"question":"How does the SBA view a seller's retained ownership after an acquisition?","url":"https://dealroom.so/sba-loans/basics/how-does-the-sba-view-a-seller-s-retained-ownership-after-an-acquisition"},{"question":"How does the SBA handle a seller's retained ownership in a change-of-ownership transaction?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-handle-a-seller-s-retained-ownership-in-a-change-of-ownership-transaction"},{"question":"How does the SBA handle a seller's retained ownership in a 7(a) change-of-ownership transaction?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-handle-a-seller-s-retained-ownership-in-a-7-a-change-of-ownership-transac"},{"question":"If the seller holds a minority stake (e.g., 5%) after the acquisition, does their retained equity count towards my 10% injection?","url":"https://dealroom.so/sba-7a/questions/if-the-seller-holds-a-minority-stake-e-g-5-after-the-acquisition-does-their-retained-equit"},{"question":"Can a business's retained earnings count as equity injection?","url":"https://dealroom.so/sba-loans/basics/can-a-business-s-retained-earnings-count-as-equity-injection"},{"question":"What specific limitations must a lender impose on a seller's post-closing consulting agreement to ensure it does not imply retained control or undue influence?","url":"https://dealroom.so/for-lenders/questions/what-specific-limitations-must-a-lender-impose-on-a-seller-s-post-closing-consulting-agree"}]},"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 — Retained Seller Interest","url":"https://dealroom.so/glossary/retained-seller-interest","source_type":"DealRoom Data"}}