Glossary · People and paperwork
In short
Someone who owns a small percentage of a business but doesn't actively participate in its operations. For an SBA loan, their role is typically limited to an investment.
If a seller remains as a minority owner, the SBA requires they not hold more than 20% of the equity and be truly passive. As the buyer, ensure their continued involvement doesn't trigger affiliation rules or create management conflicts.
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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