Glossary · People and paperwork
Key Management Personnel
In short
These are individuals critical to the operation and success of a business, often including owners, officers, and top executives. Buyers care because the SBA assesses their character and requires life insurance for those vital to loan repayment.
What it means in a deal
All key management personnel who own 20% or more of the business must meet the SBA's character requirements and often undergo background checks. Lenders typically require key man insurance on these individuals to protect the loan in case of their unexpected death or disability.
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 Key Management Personnel
- What specific scenarios involving shared directors, officers, or key employees constitute 'common management' triggering affiliation for SBA size determination?
- If a key management employee who is not an owner is a foreign national, does this affect SBA 7(a) loan eligibility?
- How does the SBA verify my business management experience?
- Is previous business ownership or management experience required to qualify?
- How does common management trigger affiliation for size standard purposes?
- How does the SBA define "management experience" for a business acquisition?
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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