SBA 7(a) Q&A
Short answer
Yes, an SBA 7(a) loan can be used for a majority partner buyout. The transaction must result in a complete change of ownership for the departing partner, and the remaining owner(s) must meet all SBA eligibility criteria.
SBA loans are suitable for change of ownership transactions, including buyouts of any percentage. The key is that the departing partner fully divests their interest. The remaining owner(s) must demonstrate sufficient management experience and financial capacity, and the business's post-buyout cash flow must support the debt.
A 40% owner wants to buy out their 60% partner for $1.2 million. An SBA 7(a) loan can facilitate this, provided the 60% partner completely sells their stake, and the 40% owner (who will become 100% owner) has the necessary experience and the business can service the debt.
Insider move
Lenders ensure the buyout is legitimate, the departing partner fully relinquishes ownership, and the acquiring partner has the capability to run the business. They review the purchase agreement, verify eligibility, and confirm the business's projected cash flow supports the new loan amount.
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 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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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