SBA 7(a) Q&A
Short answer
For a partner buyout, the remaining owners must typically inject 10% of the purchase price for the exiting partner's share, or demonstrate sufficient existing equity in the business.
The SBA requires that the transaction results in a sound financial structure. For partner buyouts, the remaining owner(s) must meet the equity injection requirement relative to the portion of the business being acquired, often satisfied by their existing equity or a new cash injection.
If two partners own 50/50 of a $1,000,000 business and one buys out the other for $500,000, the buyer needs to show $50,000 (10% of $500,000) in equity. This can come from their existing capital in the business or new cash.
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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