SBA 7(a) Q&A
Short answer
If the seller remains as an employee or consultant, their compensation must be reasonable and not interfere with the buyer's control or the business's cash flow.
The seller can remain with the business post-acquisition, typically for a transition period, as an employee or consultant. Their compensation must be at fair market value and clearly separate from any seller note payments. The arrangement should not imply that the seller retains control or an ownership interest that could trigger affiliation concerns or compromise the buyer's management authority.
You acquire a business and the seller agrees to stay on for six months as a consultant at a rate of $5,000 per month. The lender will review this agreement to ensure the compensation is reasonable for the services provided and that the seller has no decision-making authority that could impact your control or the loan repayment.
Insider move
Lenders ensure the seller's ongoing role and compensation are legitimate and do not create an affiliation issue or undue burden on the business's cash flow. They confirm the buyer maintains clear control and management.
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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