SBA loan basics
Short answer
Yes, an SBA 7(a) loan can be used to finance the buyout of an existing business partner's ownership interest, which is a common and eligible use.
SBA 7(a) loans can facilitate changes of ownership, including the buyout of a partner. The loan proceeds can cover the purchase price of the partner's share. Lenders will require an independent valuation of the business to ensure the purchase price is fair and reasonable and that the remaining owner has sufficient management experience.
Two partners own a manufacturing business 50/50. One partner wants to retire, and the other wants to buy their share. An SBA 7(a) loan for $750,000 could be used to purchase the exiting partner's 50% equity, making the remaining partner 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
SBA 7(a) Loans Overview
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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