SBA loan basics
Short answer
Yes, an SBA 7(a) loan can be used to buy out a departing business owner, provided the transaction results in a complete change of ownership or a clear path to it.
SBA 7(a) loans are eligible for financing changes of ownership, which includes buying out a partner. The loan proceeds can be used to purchase the equity interest of a departing owner, allowing the remaining owners or a new owner to take full control. The transaction must establish new ownership and management without the departing owner retaining control or significant influence.
Two partners, Alex and Ben, own a business 50/50. Ben wants to retire, and Alex wants to buy his share. Alex can apply for an SBA 7(a) loan to purchase Ben's 50% equity. Ben must completely divest his ownership interest and step down from management.
Insider move
Lenders scrutinize buyouts to ensure the departing owner truly exits the business and has no remaining control. They verify the valuation of the departing owner's share and confirm the new ownership structure meets SBA requirements.
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.
Terms in this answer
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