SBA loan basics
Short answer
Yes, an SBA 7(a) loan can be used to buy out a departing owner or partner, provided the transaction results in a complete change of ownership.
The loan must facilitate a full change of ownership where the departing owner relinquishes all equity and management control. The buying party must assume at least 51% ownership, and the transaction must be at fair market value with clear documentation.
One of two 50% partners in a marketing firm wants to retire. The remaining partner can apply for an SBA 7(a) loan to purchase the retiring partner's 50% stake, becoming the sole owner.
Insider move
Lenders scrutinize these transactions for arm's length dealings and ensure the remaining owner has the experience and the business has the cash flow to succeed without the departing owner. They also verify no residual ownership by the seller.
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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