SBA 7(a) Q&A
Short answer
When buying out a partner, the SBA assesses the value of your existing ownership stake based on the business's fair market value, typically determined by a qualified independent business valuation.
The SBA requires a professional business valuation for any change of ownership where the loan amount exceeds certain thresholds. This valuation establishes the fair market value of the entire business, from which your existing ownership stake can be derived to confirm its contribution to the equity injection.
A buyer owns 25% of a business with a fair market value of $1,200,000 as determined by an independent valuation. Their existing ownership stake is valued at $300,000, which contributes towards the equity injection for buying out the remaining partners.
Insider move
Lenders rely heavily on independent business valuations to confirm the fair market value of the business and, consequently, the value of the buyer's existing equity. They ensure the valuation is performed by a qualified appraiser.
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 partner buyouts
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