Glossary · People and paperwork
Revocable grantor trust
In short
A legal arrangement where the person who creates the trust (the grantor) can change or cancel it during their lifetime. Assets held in it are still considered owned by the grantor for tax purposes.
What it means in a deal
If a seller or a key principal holds business assets or equity in a revocable grantor trust, the SBA treats the grantor as the owner for eligibility and guarantee purposes. The trust document will be reviewed to confirm who the true beneficial owners are and if they need to be guarantors.
Official sources
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 Revocable grantor trust
- For a business owned by a trust, what citizenship and residency requirements apply to the trustee for 7(a) eligibility?
- Can a business owned by a trust be eligible for a 7(a) loan if the trustee is a foreign national?
- How does the SBA determine affiliation between businesses controlled by a common trust?
- When does common ownership through a trust or estate create affiliation for size purposes?
- Can I use inherited money that is currently in a trust to fund my equity injection?
- Can a trust or an estate be an eligible borrower for an SBA 7(a) loan?
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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