Glossary · People and paperwork
Equity Owner
In short
An individual or entity that owns a portion of a business, typically through shares or membership units. For an SBA loan, equity owners are usually required to personally guarantee the loan.
What it means in a deal
In a 7(a) acquisition, all individuals owning 20% or more of the business must sign a personal guaranty. This ensures they are fully committed and share the risk with the lender and SBA. You'll need to identify all such owners during due diligence and ensure their involvement.
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 Equity Owner
- How is prior owner debt converted to equity treated for injection purposes?
- Can investor funds from non-owner individuals be used for the equity injection?
- How does the SBA view prior owner debt converted to equity for injection purposes?
- What documentation is needed if an institutional investor provides equity but is not an owner?
- What documentation is required if a business owner contributes pre-existing business equipment as equity?
- How does the SBA verify a non-owner investor's funds used for 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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