SBA loan basics
Short answer
Yes, an SBA 7(a) loan is a common and viable option for financing the buyout of an existing business partner's ownership share.
Partner buyouts are an approved use of SBA 7(a) loan proceeds, allowing the remaining owner(s) to purchase the interest of a departing partner. This helps ensure business continuity and stability without requiring the remaining owners to use personal funds or other high-interest financing.
Two partners own a consulting firm. One partner decides to retire, and the other wishes to buy their 50% share, valued at $400,000. An SBA 7(a) loan can be used by the remaining partner to finance this buyout, maintaining full ownership of the business.
Insider move
Lenders evaluate the business's ability to support the increased debt service after the buyout, considering the financial health and management capabilities of the remaining partner(s). They also ensure the buyout transaction is structured properly with clear valuation and transfer of ownership.
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 2026-06-14. 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.
More on use of proceeds
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