SBA 7(a) Q&A
Short answer
A seller can remain as a paid consultant or employee for a limited, reasonable transition period after closing an SBA 7(a) acquisition, provided their compensation is justified and non-excessive.
The SBA permits sellers to assist in the transition of ownership, often through a consulting or employment agreement. This ensures business continuity and a smooth handover. However, the compensation must be market-rate and not used to bypass the equity injection or standby requirements for a seller note.
In a $900,000 business acquisition, the seller could be retained as a consultant for six months at $5,000 per month. This compensation must be clearly outlined and justified by the services provided, separate from the purchase price.
Insider move
Lenders review any employment or consulting agreements with the seller to ensure the terms are reasonable, the duration is limited, and the compensation is not inflated. They verify the seller's role is genuinely transitional and does not constitute ongoing control.
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.
More on seller notes & standby
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