SBA 7(a) Q&A
Short answer
Yes, the resignation of key employees during due diligence could significantly jeopardize or kill an SBA 7(a) loan approval, as it impacts the business's stability and operational continuity.
The SBA and lenders assess the acquired business's ability to operate successfully post-acquisition. The departure of key employees (e.g., top sales staff, essential technicians, managers) can severely impact the business's revenue generation, customer relationships, and operational capabilities. This change introduces significant risk, causing the lender to question the viability of the business and its ability to repay the loan.
You are acquiring a marketing agency heavily reliant on its creative director and two senior account managers. If all three resign during your due diligence period, the lender would likely pause or decline the loan, as the business's core operational strength and client retention would be severely compromised.
Insider move
Lenders value continuity and stability, especially in service-based businesses. The loss of key personnel is a major red flag, indicating potential revenue decline and operational disruption, which directly impacts the borrower's ability to service the debt.
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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