SBA loan basics
Short answer
Yes, an SBA 7(a) loan can be used to finance the buyout of an existing business partner. This allows one or more partners to purchase the equity of another.
Partner buyouts are an eligible use of 7(a) loan proceeds. The SBA generally requires that the remaining owner(s) will continue to operate the business, and the exiting partner must have no further control or financial stake in the business post-closing.
Two partners own a consulting firm. One partner wishes to retire, and the other wants to buy out their 50% share, valued at $400,000. An SBA 7(a) loan can finance this buyout, allowing the remaining partner to become the sole owner.
Insider move
Lenders will require a business valuation to ensure the purchase price is reasonable. They also verify that the exiting partner will not retain any equity or management control, and ensure the business has the cash flow to support the new debt.
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.
More on loan uses
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day