{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/how-is-the-business-valued-when-buying-out-a-50-partner","api_url":"https://dealroom.so/api/public/questions/how-is-the-business-valued-when-buying-out-a-50-partner","question":"How is the business valued when buying out a 50% partner?","topic":"Partner & owner buyout","audience":"borrower","bot_mode":"buyer","short_answer":"The business is valued based on its fair market value, determined by a qualified independent valuation, especially for loans over $500,000.","rule":"For all changes of ownership, including partner buyouts, the SBA requires that the transaction be for fair market value. For loans exceeding $500,000, an independent business valuation performed by a qualified third-party appraiser is mandatory to establish this value.","example":"If two partners are in a business valued at $1,500,000 by an independent appraiser, a 50% partner buyout would be based on purchasing shares worth $750,000. The appraiser would use methodologies like discounted cash flow or asset-based valuations.","what_lenders_check":"Lenders ensure the valuation is conducted by an independent appraiser with relevant experience and credentials. They review the valuation report for reasonableness, methodology, and compliance with SBA requirements, especially if goodwill is a significant asset.","required_facts":["Fair market value","Independent valuation","Required over $500K","Qualified appraiser"],"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/document/sop-50-10-lender-development-company-loan-programs"},{"title":"13 CFR Part 120 — Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[{"question":"Can I buy out my business partner with an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/can-i-buy-out-my-business-partner-with-an-sba-7-a-loan"},{"question":"Can a partner buyout be done with zero money down under the SBA?","url":"https://dealroom.so/sba-7a/questions/can-a-partner-buyout-be-done-with-zero-money-down-under-the-sba"},{"question":"What is the 24-month ownership rule for a $0-down SBA partner buyout?","url":"https://dealroom.so/sba-7a/questions/what-is-the-24-month-ownership-rule-for-a-0-down-sba-partner-buyout"},{"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":"Does the remaining owner have to personally guarantee the SBA loan after a buyout?","url":"https://dealroom.so/sba-7a/questions/does-the-remaining-owner-have-to-personally-guarantee-the-sba-loan-after-a-buyout"},{"question":"Can the company itself redeem the departing partner's shares with an SBA loan?","url":"https://dealroom.so/sba-7a/questions/can-the-company-itself-redeem-the-departing-partner-s-shares-with-an-sba-loan"}],"related_terms":[{"term":"Buyout of a Partner","url":"https://dealroom.so/glossary/buyout-of-a-partner"},{"term":"Partner buyout","url":"https://dealroom.so/glossary/partner-buyout"},{"term":"Owner Buyout","url":"https://dealroom.so/glossary/owner-buyout"},{"term":"Buyout","url":"https://dealroom.so/glossary/buyout"},{"term":"Partner","url":"https://dealroom.so/glossary/partner"},{"term":"Alienate the Business","url":"https://dealroom.so/glossary/alienate-the-business"}],"related_tools":[{"name":"Partner Buyout toolkit","url":"https://dealroom.so/sba-7a/partner-buyout"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-15","sba_rule_sources_checked_through":"2026-06-15"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/how-is-the-business-valued-when-buying-out-a-50-partner","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."]}