SBA 7(a) Q&A
Short answer
For partner buyouts, especially when the ownership change is less than 100%, the SBA generally requires an independent business valuation to ensure the purchase price is fair and reasonable.
When a buyer is purchasing an existing partner's share, and it's not a 100% change of ownership, the SBA mandates a business valuation report from a qualified, independent appraiser. This ensures that the purchase price, including any goodwill, accurately reflects the business's fair market value and prevents overpayment using SBA funds.
If you are buying out your 50% partner in a business, and the agreed-upon price for their share is $300,000, the SBA will require an independent business valuation to confirm that this $300,000 is a fair price for 50% of the business.
Lenders review the independent business valuation to confirm that the transaction is arm's-length and the purchase price is justified. This helps protect against fraud and ensures the business has a reasonable chance of servicing the debt.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. 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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