Glossary · People and paperwork
In short
These are the key individuals who own 20% or more of the business, or those with significant management responsibilities, regardless of ownership percentage. As a buyer, you and any Co-borrower will be considered Principals, and the SBA will scrutinize your character and financial history.
For an SBA loan, all Principals must provide Personal financial statement, tax returns, and undergo background checks (including a Felony Conviction check). Understand that your lender and the SBA will evaluate the character and Creditworthiness of every Principal involved in the transaction.
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.
Know what you'll need before you apply
Tell us about the deal and who's buying — we'll flag the guaranty, eligibility, and paperwork issues that slow SBA approval before they cost you time.
Free · No documents · Usually same-day