SBA 7(a) Q&A
Short answer
Active ownership for the 24-month rule means the owner has been involved in the day-to-day management and operations of the business.
Active ownership implies significant involvement in the strategic direction and daily operations, not merely a passive investment. The owner must have demonstrated a material role in management, decision-making, and labor within the business for the entire 24-month period prior to the buyout application.
If a partner only contributed capital and attended quarterly board meetings, they would not be considered an active owner for the 24-month rule. However, a partner who managed sales, operations, or finance daily would qualify.
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-15 · SBA sources checked through 2026-06-15. DealRoom analysis of the current SBA 7(a) rulebook for change-of-ownership / partner buyouts. 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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