For SBA lenders
Short answer
A seller can retain a minority ownership interest, typically 10% or less, in a change-of-ownership transaction, but the seller cannot control the business or hold a management position.
For a change of ownership, the buyer must acquire at least 51% of the business. If the seller retains an ownership interest, it must be a minority, non-controlling stake (usually 10% or less), and they cannot be involved in the management, daily operations, or hold a board seat in the acquired business to avoid affiliation issues with the new owner.
A buyer uses a 7(a) loan to purchase 90% of a business, with the seller retaining a 10% passive ownership interest. The seller resigns from all management positions and board seats and has no operational involvement post-closing.
SOP 50 10 - Lender and Development Company Loan Programs
13 CFR Part 121 - Small Business Size Regulations
Affiliation and Lending Criteria for SBA Business Loan Programs - Final Rule
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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