Glossary · Your money in the deal
Minority Equity Stake
In short
This is an ownership share in the business that is less than 50%, meaning you don't have controlling interest. For SBA loans, it typically refers to the portion of equity injection that isn't from the primary borrower.
What it means in a deal
If you have partners, or if the seller retains a small portion of equity post-acquisition, these are minority equity stakes. The SBA scrutinizes all equity injections to ensure they are from eligible sources. Any minority owners must also meet SBA eligibility requirements and may need to personally guarantee the loan if they own 20% or more.
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 Minority Equity Stake
- When can a minority equity stake still create affiliation for size purposes?
- When does a minority equity stake still create affiliation for size purposes?
- When does a minority equity stake still create affiliation for SBA size purposes?
- What if the seller remains as a passive investor with a minority equity stake in an acquisition?
- If the seller retains a minority equity stake in the business, does that count towards my 10% injection?
- What if a seller of a business retains a minority equity stake in the company after a 7(a) 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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