For SBA lenders
Short answer
Generally, no. The SBA typically requires a complete change of ownership (100% equity transfer) for 7(a) acquisition loans, especially if the seller retains an active role.
SBA 7(a) loans are primarily intended for 100% change of ownership transactions. If a seller retains an equity stake, even a minority one, and remains active in the business, it can raise concerns about eligibility, control, and potential affiliation, which typically results in the transaction being ineligible.
A borrower wants to buy 80% of a business, and the seller will keep 20% and continue as a managing partner. The lender would likely decline this as a 7(a) acquisition, requiring the seller to divest 100% or become a truly passive, non-owner, non-employee. If the seller's retained ownership is truly passive (e.g., as an investor with no control or employment), it *might* be allowable but would still require careful review.
Insider move
Lenders must ensure that post-acquisition, the buyer has complete control and the seller's influence is completely removed or fully passive. Any ongoing active involvement by the seller in a partial buyout could jeopardize the loan's eligibility.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on change-of-ownership underwriting
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