{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/if-i-am-buying-out-a-partner-what-is-the-minimum-equity-injection-required-for-the-new-own","api_url":"https://dealroom.so/api/public/questions/if-i-am-buying-out-a-partner-what-is-the-minimum-equity-injection-required-for-the-new-own","question":"If I am buying out a partner, what is the minimum equity injection required for the new ownership structure?","topic":"Partner buyouts","audience":"borrower","bot_mode":"buyer","short_answer":"For a partner buyout structured as a change of ownership, the minimum equity injection requirement is typically 10% of the total project costs, similar to other business acquisitions.","rule":"A partner buyout is treated as a change of ownership transaction. The SBA requires a minimum of 10% equity injection from the acquiring owner(s) based on the total project costs (which include the purchase price, working capital, and other associated fees). This ensures the buyer has a vested interest in the business.","example":"If the total project cost for buying out your partner, including the purchase price and any working capital, is $500,000, you would need to inject at least $50,000 (10%) as equity.","what_lenders_check":"Lenders confirm the actual cost of the buyout and any associated expenses to calculate the total project cost accurately. They then verify the source and unencumbered nature of the required 10% equity injection from the acquiring partner.","required_facts":["Partner buyout","Change of ownership","10% equity rule","Total project cost"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","7(a) Loan Program Terms, Conditions, and Eligibility"],"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"},{"title":"7(a) Loan Program Terms, Conditions, and Eligibility","url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility"}],"related_questions":[{"question":"If I'm buying out a partner, does the remaining partner also need to personally guarantee the SBA loan for $500,000?","url":"https://dealroom.so/sba-7a/questions/if-i-m-buying-out-a-partner-does-the-remaining-partner-also-need-to-personally-guarantee-t"},{"question":"If I am buying out a partner, does the SBA require the business to pass a cash flow test post-acquisition?","url":"https://dealroom.so/sba-7a/questions/if-i-am-buying-out-a-partner-does-the-sba-require-the-business-to-pass-a-cash-flow-test-po"},{"question":"If I am buying out a partner, how does the SBA ensure the purchase price is fair and justifiable?","url":"https://dealroom.so/sba-7a/questions/if-i-am-buying-out-a-partner-how-does-the-sba-ensure-the-purchase-price-is-fair-and-justif"},{"question":"Can an SBA 7(a) loan be used to purchase a business if the seller will retain a minority ownership stake?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-used-to-purchase-a-business-if-the-seller-will-retain-a-minority-ow"},{"question":"What are the requirements for the seller in an SBA 7(a) business acquisition loan?","url":"https://dealroom.so/sba-7a/questions/what-are-the-requirements-for-the-seller-in-an-sba-7-a-business-acquisition-loan"},{"question":"Can an SBA 7(a) loan be used to fund a partner buyout with an earn-out provision?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-used-to-fund-a-partner-buyout-with-an-earn-out-provision"}],"related_terms":[{"term":"Minimum Equity Injection","url":"https://dealroom.so/glossary/minimum-equity-injection"},{"term":"Minimum cash injection","url":"https://dealroom.so/glossary/minimum-cash-injection"},{"term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"term":"Tangible Equity Injection","url":"https://dealroom.so/glossary/tangible-equity-injection"},{"term":"Hidden Equity Injection","url":"https://dealroom.so/glossary/hidden-equity-injection"},{"term":"Equity injection verification","url":"https://dealroom.so/glossary/equity-injection-verification"}],"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":"2026-06-14","sba_rule_sources_checked_through":"2026-06-14"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-7a/questions/if-i-am-buying-out-a-partner-what-is-the-minimum-equity-injection-required-for-the-new-own","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."]}