SBA loan basics
Short answer
SBA policy generally requires a seller to divest 100% of their ownership in a business being acquired with a 7(a) loan. Limited exceptions may apply.
For a change of ownership financed by an SBA 7(a) loan, the seller is typically required to make a full exit, divesting 100% of their ownership interest. This ensures a clear transfer of control and ownership to the buyer. Any retained ownership interest by the seller, even a small percentage, could trigger affiliation rules and potentially make the transaction ineligible, as it might suggest the seller maintains control or influence.
John buys a manufacturing company using an SBA 7(a) loan. The seller, Sarah, must sell 100% of her shares to John. She cannot retain even a 5% stake in the company post-closing.
Lenders ensure a clear change of ownership. They scrutinize sales agreements and ownership structures to confirm the seller fully divests. Any retained interest would be a major red flag, potentially leading to loan ineligibility.
SOP 50 10 - Lender and Development Company Loan Programs
13 CFR Part 121 - Small Business Size Regulations
Affiliation and Lending Criteria for SBA Business Loan Programs - Final Rule
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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