{"ok":true,"canonical_url":"https://dealroom.so/glossary/buyout-of-a-partner","api_url":"https://dealroom.so/api/public/glossary/buyout-of-a-partner","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"buyout-of-a-partner","term":"Buyout of a Partner","group":"Doing the deal","definition":"This is when one or more partners purchase the ownership interest of another partner in an existing business. The SBA 7(a) loan can be used to finance this type of transaction.","what_it_means":"If you're buying out an existing partner, the SBA 7(a) loan can be structured for this purpose. The key is that the business must demonstrate strong global cash flow to support the new debt, and the remaining partner(s) must meet SBA eligibility and equity injection requirements. This is a common use for 7(a) loans.","url":"https://dealroom.so/glossary/buyout-of-a-partner","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"partner-buyout","term":"Partner buyout","url":"https://dealroom.so/glossary/partner-buyout"},{"slug":"7a-loan","term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"},{"slug":"global-cash-flow","term":"Global cash flow","url":"https://dealroom.so/glossary/global-cash-flow"},{"slug":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"}],"related_questions":[{"question":"Can tax returns of the business be used to support a partner buyout?","url":"https://dealroom.so/sba-7a/questions/can-tax-returns-of-the-business-be-used-to-support-a-partner-buyout"},{"question":"For a partner buyout of $400,000, can the departing partner provide a seller note that counts as equity?","url":"https://dealroom.so/sba-7a/questions/for-a-partner-buyout-of-400-000-can-the-departing-partner-provide-a-seller-note-that-count"},{"question":"Is a partner buyout a complete or partial change of ownership for the SBA?","url":"https://dealroom.so/sba-7a/questions/is-a-partner-buyout-a-complete-or-partial-change-of-ownership-for-the-sba"},{"question":"Can an SBA 7(a) loan finance 100% of an existing partner's share buyout?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-finance-100-of-an-existing-partner-s-share-buyout"},{"question":"For a partner buyout, what if the departing partner also has a non-compete payment?","url":"https://dealroom.so/sba-7a/questions/for-a-partner-buyout-what-if-the-departing-partner-also-has-a-non-compete-payment"},{"question":"Can an SBA 7(a) loan finance a partner buyout?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-finance-a-partner-buyout"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Buyout of a Partner","url":"https://dealroom.so/glossary/buyout-of-a-partner","source_type":"DealRoom Data"}}