SBA loan basics
Short answer
Yes, an SBA 7(a) loan can be used to buy out a minority business partner, provided the buyer becomes the majority owner (at least 51%) after the transaction.
SBA 7(a) loans are eligible for partner buyouts where the acquiring partner gains control of the business. If the buyer already owns a majority stake, they may still use the loan to increase ownership, but the primary purpose of the transaction should lead to a controlling interest for the borrower if they don't already have it.
An owner with a 40% stake wants to buy out their partner's 20% stake, bringing their ownership to 60%. An SBA 7(a) loan can finance this 20% acquisition, as the buyer achieves majority control.
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 2026-06-14. 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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