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, provided other eligibility criteria are met.
SBA 7(a) loans can finance partner buyouts, including those involving minority partners. The key is that the transaction results in a change of ownership where the acquiring owner(s) gain control of the business. An independent business valuation is typically required if the purchase price exceeds $500,000, or in situations involving related parties.
A business has two owners, one with 80% and another with 20%. The 80% owner wishes to buy out the 20% partner. An SBA 7(a) loan can finance this buyout, provided the 80% owner meets eligibility and the business can support the debt.
Lenders will ensure the buyout is legitimate, the valuation is fair, and the remaining owner has the management experience and financial capacity to operate the business post-acquisition. They will also verify all ownership percentages before and after the transaction.
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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