{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/what-if-the-departing-partner-remains-involved-as-a-consultant-after-buyout","api_url":"https://dealroom.so/api/public/questions/what-if-the-departing-partner-remains-involved-as-a-consultant-after-buyout","question":"What if the departing partner remains involved as a consultant after buyout?","topic":"Partner & owner buyout","audience":"borrower","bot_mode":"buyer","short_answer":"If a departing partner remains as a consultant, the arrangement must be structured to avoid implying retained control or undue influence over the business.","rule":"Consulting agreements with departing partners are permissible but must be for a limited duration and at arm's length, with compensation reflecting fair market value for services rendered. The SBA scrutinizes such arrangements to ensure the seller has truly divested and does not retain control or influence over the new ownership.","example":"A departing partner could be hired for a 6-month consulting agreement at $5,000/month to assist with client transitions. The agreement cannot include performance incentives tied to the business's long-term success or options to repurchase shares.","what_lenders_check":"Lenders review the consulting agreement to confirm its arm's length nature, fair compensation, and limited duration. They ensure no provisions suggest the seller retains management authority, decision-making power, or any form of equity or future interest in the business.","required_facts":["Limited duration","Arm's length agreement","Fair market compensation","No retained control"],"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":"Environmental consultant","url":"https://dealroom.so/glossary/environmental-consultant"},{"term":"Buyout","url":"https://dealroom.so/glossary/buyout"},{"term":"Partner","url":"https://dealroom.so/glossary/partner"}],"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/what-if-the-departing-partner-remains-involved-as-a-consultant-after-buyout","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."]}