SBA 7(a) Q&A
Short answer
Yes, an SBA 7(a) loan can be used to buy out a minority business partner, regardless of their ownership percentage, as long as the buyout results in a complete change of ownership for the departing partner and meets all other eligibility requirements.
SBA 7(a) loans are eligible for change of ownership transactions, which include partner buyouts. The loan proceeds can be used to purchase the ownership interest of a departing partner. The departing partner cannot retain any ownership interest, and the transaction must be a complete buyout for that individual. The remaining owner(s) must meet all SBA eligibility criteria.
A 75% owner wants to buy out their 25% partner for $300,000. An SBA 7(a) loan for $300,000 (plus working capital or fees) can be used for this purpose, assuming the business has sufficient cash flow to service the debt and the remaining owner meets all other SBA requirements.
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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