Glossary · Your money in the deal
In short
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.
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.
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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