# Does owning through a holding company avoid the SBA guarantee?

**Short answer:** No. The test counts direct and indirect ownership. An individual whose stake through any entity reaches 20% or more guarantees personally, and the entity guarantees too if it holds that much. Source: SOP 50 10 8.1, Sec. A, Ch. 5, Paras. A.1 and A.3.

Canonical page: https://www.sbaexpress.loans/answers/does-a-holding-company-owner-guarantee-an-sba-loan/
Last checked: 2026-11-08

No. SOP 50 10 8.1, Sec. A, Ch. 5, Para. A.1, looks at direct and indirect ownership. A holding company does not remove you from the test.

## Two guaranties can apply

- **You.** Any individual with direct or indirect ownership of 20% or more gives an unlimited full guaranty.
- **The entity.** Any entity with direct or indirect ownership of 20% or more gives one too (Para. A.3).

For example, suppose a holding company owns 100% of the applicant and you own 60% of the holding company. The holding company guarantees, and so do you.

## Disclosure

When a corporation, partnership or other entity holds an ownership interest, the ownership interests of all individuals must be disclosed (Para. A.1.b). All direct and indirect owners go into the SBA Loan System (Sec. A, Ch. 1, Para. F).

## Entity rules

Entity owners must be created, organized or incorporated in the United States, its territories or possessions (Sec. A, Ch. 1, Para. F). The lender must also get appropriate financial statements from each entity guaranteeing the loan (Para. A.3).

## Buyouts

App. 15 aggregates indirect interests with direct interests held by the same individual when it limits who can buy in an Owner Buyout (App. 15, Para. A.1.c). Indirect owners in a partial change of ownership must also personally guarantee the loan (App. 15, Para. A.1.c.ii).

Multi-step partial changes of ownership through a new holding company are not eligible (App. 15, Para. A.1.c.ii).

## Sources

- [SOP 50 10 8.1, Sec. A, Ch. 5, Paras. A.1 and A.3 (p. 93)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, Sec. A, Ch. 1, Para. F (p. 28)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, App. 15, Para. A.1.c (Para. A begins p. 362)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)