Glossary · Reading the business
In short
The percentage of ownership or operational influence an individual or entity has over a business. The SBA uses this to determine who is considered a "principal" and to assess affiliation.
For an SBA loan, any individual with a 20% or more ownership stake is considered a "principal" and must provide a personal guaranty and undergo a character check. The SBA also evaluates control factors to determine if businesses are "affiliated," which can impact size standard eligibility.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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