Glossary · People and paperwork
Controlling Party
In short
This is any individual or entity with significant influence over the business, typically owning 20% or more, or having key management responsibilities. All Controlling Parties must provide personal guarantees.
What it means in a deal
The SBA defines a Controlling Party as anyone owning 20% or more of the business, or holding certain positions like CEO, President, or managing member. All Controlling Parties must personally guarantee the SBA loan. This ensures they are fully committed and accountable, so be prepared for these guarantees.
Official sources
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.
Related terms
Common questions about Controlling Party
- What are the specific conditions for a seller to retain a passive, non-controlling minority stake in an SBA 7(a) acquisition?
- Can a third-party loan, not from the seller, count towards the minimum equity injection?
- What specific language must a non-SBA third-party standby agreement include to ensure eligibility?
- How does a lender verify the full standby status of a non-SBA third-party debt?
- Can an SBA 7(a) loan finance the purchase of intellectual property rights from a third party?
- What are the eligibility requirements for funds borrowed from a third party to count as equity injection?
Defined by CapBench 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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