For SBA lenders
Short answer
Lenders must ensure a seller's post-closing consulting agreement is for a reasonable duration and compensation, does not imply retained control, and does not interfere with the buyer's independent management.
While a seller can assist with transition post-closing, the consulting agreement must be bona fide and not grant the seller undue influence or control over the business. The term and compensation must be market-rate and not excessively long, preventing the appearance of the seller retaining de facto ownership or management control, which could affect affiliation and eligibility.
A seller agrees to a 12-month consulting agreement for $5,000 per month after selling their business via a 7(a) loan. The lender reviews the agreement to ensure the scope of services is clearly defined, compensation is reasonable for the industry, and it contains no provisions that would allow the seller to dictate operational decisions or retain control.
Insider move
Lenders worry that disguised seller control through a consulting agreement could undermine the buyer's ownership and management, or trigger affiliation issues, jeopardizing eligibility. Any such agreement must be clearly documented and reviewed for compliance.
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.
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