Glossary · People and paperwork
In short
This is any individual who owns 20% or more of the equity in a business. All principal owners of a borrower business must personally guarantee an SBA 7(a) loan.
If you're buying a business with partners, anyone owning 20% or more is a principal owner and must sign a personal guarantee. This is a non-negotiable SBA requirement. Ensure all partners understand this obligation before moving forward with a 7(a) loan.
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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