Glossary · Doing the deal
Minority owner
In short
An individual or entity that owns less than 50% of a business, meaning they don't have controlling interest.
What it means in a deal
If you're acquiring a business where a seller retains a minority stake, or if you have a partner who is a minority owner, understand their role and any agreements. SBA rules usually require all owners with 20% or more equity to personally guarantee the loan, regardless of majority status.
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 owner
- Can the personal guaranty be limited for certain passive investors or minority owners?
- Can a corporate entity provide a guaranty instead of a personal one for some minority owners?
- Can a 7(a) loan be used to pay out a portion of the seller's equity at closing, even if they remain a minority owner?
- Does the SBA permit a seller to retain a minority ownership stake while holding a standby note?
- Can an SBA 7(a) loan be used to buy out a minority partner with less than 20% ownership?
- What is required if the seller in a change-of-ownership 7(a) loan transaction retains a minority equity stake?
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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