SBA 7(a) Q&A
Short answer
Yes, generally all owners of 20% or more of the business, including the remaining partner, must provide a full personal guarantee for an SBA 7(a) loan.
SBA policy requires that all owners of 20% or more equity in the business provide an unconditional personal guarantee. In a partner buyout, if the remaining partner holds 20% or more of the post-acquisition ownership, they must personally guarantee the loan, regardless of whether they are directly benefiting from the loan proceeds for the buyout.
You and your partner each own 50% of a business. You use an SBA loan to buy out your partner's 50% stake, making you a 100% owner. You would provide a personal guarantee, and if your partner had remained with 20% or more, they would also need to guarantee.
Lenders confirm all principals with 20% or more ownership sign personal guarantees to secure the loan. They also assess the remaining partner's creditworthiness and financial stability.
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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