SBA 7(a) Q&A
Short answer
If a seller stays involved as an employee or consultant, the compensation must be reasonable and not create an 'associate' relationship that affects eligibility or control.
The SBA permits sellers to remain as employees or consultants, but their compensation must be at market rates, and the arrangement cannot grant them control or ownership interests in the business after the sale. Any seller financing must still adhere to standby requirements.
If a seller stays on as a consultant for one year at $75,000 per year, this must be a verifiable market rate for their expertise. The consulting agreement cannot include provisions for profit-sharing or future ownership options, which could create an impermissible affiliation.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Affiliation and Lending Criteria for SBA Business Loan Programs - Final Rule
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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