{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/if-i-m-buying-out-a-partner-can-the-sba-loan-cover-the-entire-100-of-their-ownership-share","api_url":"https://dealroom.so/api/public/questions/if-i-m-buying-out-a-partner-can-the-sba-loan-cover-the-entire-100-of-their-ownership-share","question":"If I'm buying out a partner, can the SBA loan cover the entire 100% of their ownership share?","topic":"Partner buyouts","audience":"borrower","bot_mode":"buyer","short_answer":"Yes, an SBA 7(a) loan can be used to finance the purchase of 100% of an exiting partner's ownership share, provided the remaining owner(s) meet the equity injection requirements and other eligibility criteria.","rule":"SBA loans can finance a change of ownership, including the buyout of a partner's entire share. The transaction must result in the continuing owner(s) having at least a 10% equity injection (calculated on the total project cost, including the buyout amount) and maintaining overall control of the business.","example":"If you and your partner each own 50% of a business valued at $1,000,000, an SBA loan could finance the $500,000 purchase of your partner's share. You would still need to provide your own 10% equity injection on the total project cost.","what_lenders_check":"Lenders will assess the continuing owner's management experience, creditworthiness, and ability to meet the equity injection. They also ensure the buyout transaction is fair, independently valued, and that the exiting partner truly divests and has no ongoing control.","required_facts":["100% partner buyout","SBA loan use","Equity injection","Continuing owner control","Fair valuation"],"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":"M&A advisor","url":"https://dealroom.so/glossary/ma-advisor"},{"term":"Buyout of a Partner","url":"https://dealroom.so/glossary/buyout-of-a-partner"},{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"},{"term":"Out of pocket","url":"https://dealroom.so/glossary/out-of-pocket"},{"term":"SBA resource partner","url":"https://dealroom.so/glossary/sba-resource-partner"},{"term":"100% collateralization","url":"https://dealroom.so/glossary/100-collateralization"}],"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-m-buying-out-a-partner-can-the-sba-loan-cover-the-entire-100-of-their-ownership-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."]}