SBA loan basics
Short answer
Yes, an SBA 7(a) loan can be used to finance the buyout of an existing business partner, provided the transaction meets specific SBA requirements for change of ownership.
The SBA permits the use of 7(a) loans for change of ownership transactions, including partner buyouts, allowing the remaining partner(s) to acquire the full equity of the departing owner. The transaction must result in a complete change of ownership or control, and the business must continue to operate.
Two partners own a business 50/50. One partner wants to retire. The remaining partner can apply for an SBA 7(a) loan to purchase the exiting partner's 50% stake, becoming the sole owner.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
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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