{"ok":true,"canonical_url":"https://dealroom.so/glossary/management-buyout","api_url":"https://dealroom.so/api/public/glossary/management-buyout","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":"management-buyout","term":"Management buyout","aka":"MBO","group":"Doing the deal","definition":"A transaction where the existing management team of a company acquires a controlling stake in the business from its current owners.","what_it_means":"While more common in larger deals, an MBO can occur if an internal manager (not the owner) buys the company. For an SBA 7(a) loan, the manager must meet all eligibility requirements and inject sufficient equity, like an external buyer. The SBA looks for a clear change of ownership.","url":"https://dealroom.so/glossary/management-buyout","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":"change-of-ownership","term":"Change of ownership","url":"https://dealroom.so/glossary/change-of-ownership"},{"slug":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"slug":"key-principal","term":"Key principal","url":"https://dealroom.so/glossary/key-principal"},{"slug":"business-acquisition-loan","term":"Business acquisition loan","url":"https://dealroom.so/glossary/business-acquisition-loan"}],"related_questions":[{"question":"How does the SBA verify my business management experience?","url":"https://dealroom.so/sba-loans/basics/how-does-the-sba-verify-my-business-management-experience"},{"question":"Is previous business ownership or management experience required to qualify?","url":"https://dealroom.so/sba-loans/basics/is-previous-business-ownership-or-management-experience-required-to-qualify"},{"question":"How does common management trigger affiliation for size standard purposes?","url":"https://dealroom.so/for-lenders/questions/how-does-common-management-trigger-affiliation-for-size-standard-purposes"},{"question":"How does the SBA define \"management experience\" for a business acquisition?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-define-management-experience-for-a-business-acquisition"},{"question":"How does common management trigger affiliation for SBA size standard purposes?","url":"https://dealroom.so/sba-7a/questions/how-does-common-management-trigger-affiliation-for-sba-size-standard-purposes"},{"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 — Management buyout","url":"https://dealroom.so/glossary/management-buyout","source_type":"DealRoom Data"}}