SBA 7(a) Q&A
Short answer
For a $0-down partner buyout, the business's pro forma debt-to-worth ratio must be no greater than 9:1 after the loan closes.
The pro forma debt-to-worth ratio measures the total liabilities of the business relative to its tangible net worth, calculated after the SBA loan funds. For a zero equity injection in a partner buyout, the SBA requires this ratio to be 9:1 or less, indicating a healthy financial structure.
If a business has $900,000 in debt and $100,000 in tangible net worth after the buyout loan, its debt-to-worth ratio is 9:1, qualifying for the 0% injection. If it had $950,000 in debt and $100,000 in net worth, the ratio would be 9.5:1, requiring a 10% injection.
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-15 · SBA sources checked through 2026-06-15. DealRoom analysis of the current SBA 7(a) rulebook for change-of-ownership / partner buyouts. 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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