SBA 7(a) Q&A
Short answer
Yes, an SBA 7(a) loan can be used to buy out a minority partner, regardless of their ownership percentage, as long as other eligibility requirements are met.
The SBA 7(a) loan program facilitates changes of ownership, including partner buyouts. There is no specific restriction based on the percentage of ownership being acquired, as long as the transaction results in a viable business entity and meets general eligibility criteria for the loan and the borrower. The remaining owner's experience and the business's ability to service the debt will be key.
A business has three partners: A (60%), B (25%), and C (15%). Partner C wishes to be bought out for $150,000. An SBA 7(a) loan can be used by the remaining partners (or Partner A buying out C) to finance this $150,000, assuming the business can support the debt and other conditions are met.
Insider move
Lenders will assess the post-buyout ownership structure, the experience and character of the remaining owners, and the business's cash flow to ensure it can support the new debt burden. They also look for any potential affiliation issues that might arise.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
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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