SBA 7(a) Q&A
Short answer
The purchase price in a partner buyout must be supported by a professional business valuation, especially if it exceeds $500,000, to ensure fair market value.
For a change of ownership where the loan amount exceeds $500,000, a business valuation must be performed by a qualified independent third party. This valuation justifies the purchase price and ensures the transaction is at arm's length, even between existing partners.
If you are buying out your partner's 50% share of a business for $600,000, and the total business value is $1.2 million, a qualified business valuation must be obtained to justify that $1.2 million value and the $600,000 buyout price.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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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