{"ok":true,"canonical_url":"https://dealroom.so/sba-7a/questions/what-is-the-maximum-percentage-of-a-partner-buyout-that-can-be-financed-by-an-sba-7-a-loan","api_url":"https://dealroom.so/api/public/questions/what-is-the-maximum-percentage-of-a-partner-buyout-that-can-be-financed-by-an-sba-7-a-loan","question":"What is the maximum percentage of a partner buyout that can be financed by an SBA 7(a) loan?","topic":"Partner buyouts","audience":"borrower","bot_mode":"buyer","short_answer":"An SBA 7(a) loan can finance up to 100% of an eligible partner buyout, provided the total loan amount does not exceed the SBA's maximum and the transaction is justified by a valuation.","rule":"The SBA 7(a) loan program allows for the financing of partner buyouts, enabling one or more owners to acquire the equity interest of a departing partner. There isn't a specific percentage cap for the buyout itself; rather, the loan covers the eligible cost of the acquisition. The total loan amount cannot exceed $5 million, and a business valuation is typically required to justify the purchase price.","example":"Two partners own a business valued at $1,000,000. One partner wants to buy out the other's 50% stake for $500,000. An SBA 7(a) loan can finance this entire $500,000 buyout, assuming all other eligibility and underwriting criteria are met.","what_lenders_check":"Lenders ensure the buyout price is fair and supported by a valuation. They also assess the financial and management strength of the remaining owner(s) to ensure the business will thrive post-buyout and effectively repay the loan without the departing partner's involvement.","required_facts":["Partner buyout financing","Up to 100% of buyout","SBA loan maximum","Business valuation","Remaining owner strength"],"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":"Buyout of a Partner","url":"https://dealroom.so/glossary/buyout-of-a-partner"},{"term":"Partner buyout","url":"https://dealroom.so/glossary/partner-buyout"},{"term":"Maximum SBA 7(a) Loan Amount","url":"https://dealroom.so/glossary/maximum-sba-7-a-loan-amount"},{"term":"SBA resource partner","url":"https://dealroom.so/glossary/sba-resource-partner"},{"term":"Buyout","url":"https://dealroom.so/glossary/buyout"},{"term":"Cancellation of the SBA guaranty","url":"https://dealroom.so/glossary/cancellation-of-the-sba-guaranty"}],"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/sba-7a/questions/what-is-the-maximum-percentage-of-a-partner-buyout-that-can-be-financed-by-an-sba-7-a-loan","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."]}