Glossary · Doing the deal
Partner buyout
In short
The process of one or more partners acquiring the ownership interest of another partner in a business. An SBA 7(a) loan can finance this if specific conditions are met, such as a change of ownership.
What it means in a deal
For a partner buyout with an SBA 7(a) loan, the selling partner must completely divest their ownership. The loan proceeds can't go to the business itself, only to the selling partner. Ensure the deal structure clearly separates the buying and selling entities to comply with SBA change of ownership rules.
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 Partner buyout
- For a partner buyout, what if the departing partner also has a non-compete payment?
- Can an SBA 7(a) loan finance a partner buyout?
- How does the purchase agreement structure affect an SBA partner buyout?
- Is member or board consent needed for an SBA partner buyout?
- How does an operating agreement impact an SBA partner buyout loan?
- When is an independent business valuation required for 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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