SBA 7(a) Q&A
Short answer
If a seller remains as a paid consultant, their compensation must be reasonable and market-based for the services provided, and it cannot interfere with any full standby seller note arrangements.
The SBA allows for sellers to remain as consultants post-closing to assist with transition, but the compensation must be for legitimate services at fair market value and documented separately. It cannot be a disguised form of loan repayment or a way to circumvent standby requirements for a seller note.
A seller provides a $200,000 standby note for a business acquisition and also enters a 6-month consulting agreement for $5,000 per month. The consulting fee is permissible if it's fair market value for the services, and the standby note terms remain unaffected.
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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