Glossary · People and paperwork
Corporation
In short
A legal entity separate from its owners, providing liability protection. This structure affects how the business is bought and your personal risk.
What it means in a deal
When acquiring a corporation, you can either buy its assets (asset purchase) or its stock (stock purchase). An asset purchase is common with SBA loans, as it typically avoids inheriting the seller's past liabilities. All owners with 20% or more equity in the acquiring corporation must personally guarantee the SBA loan.
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 Corporation
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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