SBA loan basics
Short answer
Yes, an SBA 7(a) loan can be an excellent option for buying out an existing business partner, allowing one owner to acquire the other's equity and gain full control.
The SBA permits the use of 7(a) loan proceeds for changes of ownership, including partner buyouts. The loan can finance the purchase of the departing partner's equity, provided the transaction results in a sound business with a clear ownership structure and management plan.
Two partners own a business 50/50. One partner wishes to retire. The remaining partner can secure a $500,000 SBA 7(a) loan to purchase the retiring partner's 50% share of the business.
Insider move
Lenders will scrutinize the business valuation, the terms of the buyout, and the remaining owner's ability to manage and repay the loan independently. They ensure the buyout price is reasonable and that the business remains viable post-transaction.
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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