SBA 7(a) Q&A
Short answer
The seller must be current on all government obligations, be willing to fully divest, and potentially provide a standby note.
The seller cannot be debarred from federal programs. They must fully divest ownership and management interest in the business being sold. If a seller note is involved, it must adhere to SBA standby requirements to count toward the buyer's equity.
The seller of a business for $700,000 must certify they have no outstanding federal defaults and will completely exit the business after the sale. If they provide a $70,000 seller note, it must be on full standby.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
SBA Form 1919 - Borrower Information Form
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.
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day