For SBA lenders
Short answer
The SBA primarily considers the new owner's direct relevant industry experience, particularly in operations, finance, and personnel management, to ensure a high probability of success.
For business acquisitions or startups, the SBA emphasizes that the new owner or management team must possess adequate relevant experience. This means demonstrating a track record in managing a business of similar size and scope, understanding the industry, and having skills in the core functions of running a business (e.g., sales, marketing, finance, HR, operations). Lacking this can indicate higher risk.
A borrower with 20 years of experience as a regional manager for a large restaurant chain applies for a 7(a) loan to acquire a local diner. The lender views this as strong relevant management experience, covering operations, personnel, and financial oversight in a related industry.
Insider move
Lenders must thoroughly vet the management experience of new owners, especially for acquisitions. Inadequate or irrelevant experience is a significant underwriting risk and can be a reason for SBA to question prudent lending standards if a loan defaults.
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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