Glossary · Your money in the deal
Ownership Stake
In short
This refers to the percentage of the business you own. It determines your control, rights to profits, and responsibilities within the company.
What it means in a deal
For an SBA 7(a) loan, any individual owning 20% or more of the business is generally considered a "key principal" and must personally guarantee the loan. Your ownership stake directly impacts your personal liability and decision-making power. Be clear on all equity agreements.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
SBA Form 1919 — Borrower Information Form
U.S. Small Business Administration · SBA form
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Ownership Stake
- If an investor provides equity for my business acquisition, must they take an ownership stake?
- What if my existing ownership stake is valued as part of the equity injection for a buyout?
- When buying out a partner, how does the SBA assess the value of my existing ownership stake?
- If my ownership stake is less than 20%, do I still need to personally guarantee the loan?
- Does the SBA permit a seller to retain a minority ownership stake while holding a standby note?
- Do all individuals with an ownership stake of 20% or more need to provide a full personal guaranty?
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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