For SBA lenders
Short answer
A seller can remain as a paid consultant post-closing, but the consulting agreement must be for a limited duration, market-rate compensation, and clearly define a non-managerial, advisory role to avoid affiliation.
The SBA allows for seller consulting agreements to facilitate a smooth transition of the business. However, the agreement's terms must ensure the seller does not retain control, influence, or ownership that would trigger affiliation or undermine the buyer's independent management. Compensation must be reasonable for the services rendered.
A seller agrees to a 12-month consulting agreement at $5,000 per month to assist with client introductions and operational advice. The agreement specifies the seller has no voting rights, management authority, or ownership stake. This is generally acceptable.
Insider move
Lenders must scrutinize consulting agreements to ensure they do not create de facto control by the seller, which could lead to affiliation issues. The duration and terms must align with a transitional, non-management role.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
13 CFR Part 121 - Small Business Size Regulations
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.
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