Glossary · Your money in the deal
Majority equity stake
In short
Owning more than 50% of a company's shares or ownership interests, giving the holder controlling interest and decision-making power. This is typically required for SBA borrowers.
What it means in a deal
The SBA typically requires the buyer to hold a majority equity stake (51% or more) in the acquired business. This ensures the borrower has control and aligns with the owner-operator principle. If multiple buyers are involved, their combined ownership must meet this threshold, and all owners with 20% or more must personally guarantee the 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 Majority equity stake
- Can an SBA 7(a) loan be used to purchase a majority stake in a business, not 100%?
- Can I use an SBA 7(a) loan to buy out a business partner who holds a majority stake?
- Can an SBA 7(a) loan be used to purchase a majority stake, but not 100%, of a business?
- Can an SBA 7(a) loan finance the purchase of a majority stake, like 75%, in a business instead of 100%?
- Can I use an SBA 7(a) loan to finance the purchase of a majority stake, but not 100%, of a business?
- When can a minority equity stake still create affiliation for size purposes?
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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