Glossary · People and paperwork
Silent partner
In short
An investor in a business who shares in profits or losses but does not take an active role in management. They typically provide capital without operational input.
What it means in a deal
For an SBA loan, a silent partner's investment counts towards equity injection, provided the funds are unencumbered. Ensure their role is clearly defined in operating agreements to avoid future disputes, especially regarding decision-making authority.
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 Silent partner
- For a partner buyout, what if the departing partner also has a non-compete payment?
- How does the SBA differentiate between a general partner and a limited partner for personal guaranty requirements?
- Can an SBA 7(a) loan finance a partner buyout where the exiting partner is a family member?
- For a partner buyout of $400,000, can the departing partner provide a seller note that counts as equity?
- Can an SBA 7(a) loan finance a partner buyout if the exiting partner also provides an earn-out?
- What are the specific requirements for a partner buyout with an SBA 7(a) loan when one partner is departing?
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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