Buy out a business partner with a 7(a)
You already run the business and you're buying out a co-owner. Here's how the SBA treats it — and a toolkit to structure, price, and pressure-test the deal.
Last reviewed June 2026 · Written against SOP 50 10 8 and current SBA notices
How the SBA sees a partner buyout
A buyout is a change of ownership. If you end up owning 100%, it's a complete change of ownership — the only structure eligible for the true $0-down path (24-month active ownership + a business debt-to-worth of 9:1 or better). If other owners stay, it's a partial change of ownership: a 10% equity injection applies and every remaining 20%+ owner must guarantee. The deal can be a cross-purchase (you buy the stake) or a company redemption (the business buys it back).
The partner buyout toolkit
Six tools to classify, structure, price, and document the buyout:
Tool 1
Partner Buyout Wizard
Classify your structure: complete vs partial change of ownership, cross-purchase vs redemption, stock vs asset.
1. After the buyout, will you own 100% of the business?
2. How is the partner being paid out?
3. Purchase form
Answer all 3 questions to see your structure (0/3)
Tool 2
Ownership Structure Calculator
Before/after ownership and who must personally guarantee the SBA loan.
| Owner | Before | After | Guarantees? |
|---|---|---|---|
| You | 50% | 100% | Yes (≥20%) |
| Exiting partner | 50% | 0% | Exits |
You reach 100% — complete change of ownership.
Tool 3
Consideration Planner
Buyer cash, seller note, company redemption, assumed debt — and the loan + injection that result.
Injection gap of $100,000 vs the 10% minimum — add cash, or if you've owned and run the business 24+ months (debt-to-worth ≤ 9:1) check the box above to waive it. A seller note counts only on full lifetime standby, up to half the 10%.
Tool 4
SBA Eligibility Checker
Flags the buyout-specific issues: 100% rule, $0-down path, guarantees, standby, cash-out.
Check what's true about your buyout — the tool derives whether a down payment is needed and what's left to clear.
Down payment
10% equity injection required
To reach $0 down you need all three: 100% ownership, 24+ months actively owning/running the business, and post-deal debt-to-worth ≤ 9:1. Otherwise plan on a 10% injection (a full-standby seller note can cover up to half).
4 requirements left to confirm
- 100% ownership after the buyout (complete change of ownership)
- Every 20%+ owner gives an unlimited personal guarantee
- No seller note, or it's on full standby for the loan's life
- No loan proceeds cash out the remaining owner
Tool 5
Valuation / Cash-on-Hand Adjuster
Adjust enterprise value for cash, debt, and working capital to price the partner's stake.
Equity value = enterprise value + cash − debt ± working-capital adjustment. The partner's buyout price is their ownership share of equity. Lenders require an independent business valuation on a change of ownership above SOP thresholds.
Tool 6
Required Document Checklist
Everything a lender will want for a partner-buyout change of ownership.
0/10 ready
Estimates for planning only — not a credit decision or SBA eligibility determination. Confirm structure and eligibility with an SBA lender and current SBA guidance.