Borrower guide · Use case
SBA loan for a partner buyout
Buying out a co-owner is one of the cleanest uses of a 7(a) — you already know the business. The SBA just treats it as a specific kind of ownership change.
How the SBA treats a buyout
Financing a partner’s exit is a change of ownership, and the SBA requires that the remaining buyer(s) hold 100% of the business afterward — a full buyout, not a partial stake purchase. That keeps ownership clean and the guarantee complete.
Equity and the existing-owner advantage
Standard change-of-ownership equity rules apply, but an existing owner who has been on the books for at least the prior year and whose balance sheet is sound may face a reduced injection requirement, because they are not a new entrant. Confirm the current treatment with your lender.
Does it carry the debt?
As with any acquisition, the deal turns on coverage — the business’s earnings against the new payment. A note from the departing partner on standby can bridge part of the price, exactly as a seller note does in an outside acquisition.
Business affordability calculator
Enter the business cash flow and the buyout price to see whether the numbers support the debt.
Check the coverage →Common questions
Can I use an SBA loan to buy out a partner?
Yes. A partner buyout is a change of ownership; a 7(a) can fund it, and the remaining owner(s) must hold 100% afterward.
Do I need a down payment to buy out a partner?
Standard change-of-ownership equity rules apply, but an established existing owner with a sound balance sheet may face a reduced injection. Confirm with your lender.
Can the departing partner finance the buyout?
Partly — a note from the exiting partner on standby can bridge part of the price, like a seller note in an outside acquisition.
Keep going
Rules described here follow SBA SOP 50 10 8 (effective June 1, 2025) and can change; lenders add their own overlays. This is education, not advice — confirm specifics with your lender. Figures cited as “our data” come from the SBA 7(a) & 504 FOIA record, released 2026-06-30.