Glossary · Your money in the deal
Equity Position
In short
This refers to the percentage of ownership an individual holds in a business. It determines control, profit share, and personal guarantee requirements for SBA loans.
What it means in a deal
For an SBA loan, anyone with a 20% or greater equity position in the borrowing entity must provide a personal guarantee. Understand your and any partners' equity positions early to manage personal guarantee obligations. This also dictates your share of the business's future profits.
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 Position
- What is the SBA's general requirement for lien position on business collateral?
- What is the SBA's requirement for a buyer's post-closing working capital position?
- When can a second lien position be acceptable for specific assets on a 7(a) loan?
- What are the SBA's requirements for obtaining a first lien position on all principal business assets?
- Does the SBA always require a first lien position on all business assets for an acquisition loan?
- How does the SBA view a second lien position on real estate collateral for a 7(a) loan?
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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