Glossary · Doing the deal
Management buyout(MBO)
In short
A transaction where the existing management team of a company acquires a controlling stake in the business from its current owners.
What it means in a deal
While more common in larger deals, an MBO can occur if an internal manager (not the owner) buys the company. For an SBA 7(a) loan, the manager must meet all eligibility requirements and inject sufficient equity, like an external buyer. The SBA looks for a clear change of ownership.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Management buyout
- How does the SBA verify my business management experience?
- Is previous business ownership or management experience required to qualify?
- How does common management trigger affiliation for size standard purposes?
- How does the SBA define "management experience" for a business acquisition?
- How does common management trigger affiliation for SBA size standard purposes?
- Can an SBA 7(a) loan finance a partner buyout?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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