{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/for-a-change-of-ownership-what-is-required-if-the-seller-wishes-to-remain-as-a-paid-consul","api_url":"https://dealroom.so/api/public/questions/for-a-change-of-ownership-what-is-required-if-the-seller-wishes-to-remain-as-a-paid-consul","question":"For a change-of-ownership, what is required if the seller wishes to remain as a paid consultant post-closing?","topic":"Change-of-Ownership","audience":"lender","bot_mode":"lender","short_answer":"If a seller remains as a paid consultant, the lender must ensure the arrangement is for a reasonable duration and compensation, does not constitute seller control, and the buyer assumes full management and operational control immediately.","rule":"SBA rules for change of ownership require the buyer to assume full control and management of the business. A seller remaining as a paid consultant is acceptable, but the arrangement must be limited in scope and duration (typically up to 12 months for training/transition) and the compensation must be reasonable and market-based, not contingent on business performance.","example":"A buyer acquires a business and the seller agrees to stay on as a consultant for 6 months to assist with customer transitions at a fixed monthly fee. The lender reviews the consulting agreement to ensure the fee is reasonable, the term is limited, and the buyer has clear authority over all business operations from day one.","what_lenders_check":"The primary concern is preventing the seller from retaining de facto control, which undermines the 'change of ownership' principle. Lenders must scrutinize consulting agreements for excessive terms, performance-based compensation, or language that limits the buyer's authority, which could trigger an eligibility issue or affiliation concern.","required_facts":["Seller as consultant","Reasonable duration","Fixed compensation","Buyer control","Management transfer","Affiliation risk"],"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":[{"question":"How does the SBA evaluate the reasonableness of the purchase price in a 7(a) change-of-ownership transaction?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-evaluate-the-reasonableness-of-the-purchase-price-in-a-7-a-change-of-owne"}],"related_terms":[{"term":"Change of ownership","url":"https://dealroom.so/glossary/change-of-ownership"},{"term":"Complete Change of Ownership","url":"https://dealroom.so/glossary/complete-change-of-ownership"},{"term":"Change-of-ownership loan","url":"https://dealroom.so/glossary/change-of-ownership-loan"},{"term":"Change-of-Ownership Transaction","url":"https://dealroom.so/glossary/change-of-ownership-transaction"},{"term":"Change in ownership","url":"https://dealroom.so/glossary/change-in-ownership"},{"term":"Bona Fide Change of Ownership","url":"https://dealroom.so/glossary/bona-fide-change-of-ownership"}],"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/for-lenders/questions/for-a-change-of-ownership-what-is-required-if-the-seller-wishes-to-remain-as-a-paid-consul","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."]}