{"ok":true,"canonical_url":"https://dealroom.so/sba-loans/basics/can-i-use-an-sba-7-a-loan-to-buy-out-a-departing-business-partner-s-share","api_url":"https://dealroom.so/api/public/questions/can-i-use-an-sba-7-a-loan-to-buy-out-a-departing-business-partner-s-share","question":"Can I use an SBA 7(a) loan to buy out a departing business partner's share?","topic":"Use of Funds - Partner Buyout","audience":"new","bot_mode":"buyer","short_answer":"Yes, SBA 7(a) loans can be used to buy out a departing business partner, allowing the remaining owner(s) to retain full control of the business.","rule":"An eligible use of 7(a) loan proceeds is to finance a change of ownership, including the buyout of a partner's interest. The transaction must result in the continuing operation of the business, and the exiting partner cannot remain involved in the business's management or retain an equity stake.","example":"A 50/50 partnership, 'Creative Designs LLC,' has one partner wanting to retire. The remaining partner can secure an SBA 7(a) loan for $250,000 to purchase the departing partner's 50% equity stake, allowing the business to continue under sole ownership.","what_lenders_check":"Lenders require a business valuation to ensure the buyout price is fair and reasonable. They also verify that the departing partner has no ongoing financial interest or management role after the transaction to prevent affiliation issues.","required_facts":["Partner buyout","Change of ownership","Continuing operation","Departing partner exit","Business valuation"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[],"related_terms":[{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"},{"term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"},{"term":"SBA 7(a) Loan Program","url":"https://dealroom.so/glossary/sba-7-a-loan-program"},{"term":"SBA 7(a) loan guaranty","url":"https://dealroom.so/glossary/sba-7-a-loan-guaranty"},{"term":"SBA 7(a) program","url":"https://dealroom.so/glossary/sba-7-a-program"},{"term":"Standard 7(a) loan","url":"https://dealroom.so/glossary/standard-7-a-loan"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-loans/basics/can-i-use-an-sba-7-a-loan-to-buy-out-a-departing-business-partner-s-share","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}