Can I buy out my business partner with an SBA 7(a) loan?

Yes. A partner buyout is a change of ownership under SOP 50 10 8 and is one of the most common 7(a) acquisition uses. If you reach 100% it's a complete change of ownership; if other owners remain it's a partial change.

Can a partner buyout be done with zero money down?

Sometimes. A true $0-down partner buyout requires the acquiring owner to have owned and actively run the business for at least the prior 24 months and the business to show a debt-to-worth of 9:1 or better. Otherwise plan on a 10% equity injection.

Does the remaining owner have to personally guarantee the loan?

Yes — every owner of 20% or more must give an unlimited personal guarantee, including the owner remaining after the buyout.

Can a seller note help fund the buyout?

Yes. A seller note counts toward the equity injection only on full standby (no payments) for the life of the loan, and only up to half of the 10% requirement.

Buy out a business partner with a 7(a)

You already run the business and you're buying out a co-owner. Here's how the SBA treats it — and a toolkit to structure, price, and pressure-test the deal.

Last reviewed June 2026 · Written against SOP 50 10 8 and current SBA notices

How the SBA sees a partner buyout

A buyout is a change of ownership. If you end up owning 100%, it's a complete change of ownership — the only structure eligible for the true $0-down path (24-month active ownership + a business debt-to-worth of 9:1 or better). If other owners stay, it's a partial change of ownership: a 10% equity injection applies and every remaining 20%+ owner must guarantee. The deal can be a cross-purchase (you buy the stake) or a company redemption (the business buys it back).

The hard lines: reach 100% for the zero-down path; otherwise 10% in. Loan proceeds can't become cash-out to the owner who stays. A seller note only counts as injection on full lifetime standby, capped at half the 10%.

The partner buyout toolkit

Six tools to classify, structure, price, and document the buyout:

Tool 1

Partner Buyout Wizard

Classify your structure: complete vs partial change of ownership, cross-purchase vs redemption, stock vs asset.

1. After the buyout, will you own 100% of the business?

Yes — I'll own 100%No — other owners stay

2. How is the partner being paid out?

I buy their stakeCompany redeems it

3. Purchase form

Stock / interestAssets

Answer all 3 questions to see your structure (0/3)

Tool 2

Ownership Structure Calculator

Before/after ownership and who must personally guarantee the SBA loan.

Your current %

Partner % you're acquiring

Other owners (stay) %

Owner	Before	After	Guarantees?
You	50%	100%	Yes (≥20%)
Exiting partner	50%	0%	Exits

You reach 100% — complete change of ownership.

Tool 3

Consideration Planner

Buyer cash, seller note, company redemption, assumed debt — and the loan + injection that result.

Buyout price (partner's stake)

Your cash injection

Seller note (full standby)

Company redemption / cash

Assumed / refinanced debt

I qualify for the $0-down path — I've owned and actively run this business for the last 24 months, and post-deal debt-to-worth is ≤ 9:1. (Your existing ownership replaces the down payment — no injection required.)

SBA loan needed$1,000,000

Sources cover$0 of $1,000,000

Required equity injection$100,000

Counted injection (cash + standby note ≤½)$0

Injection gap of $100,000 vs the 10% minimum — add cash, or if you've owned and run the business 24+ months (debt-to-worth ≤ 9:1) check the box above to waive it. A seller note counts only on full lifetime standby, up to half the 10%.

Tool 4

SBA Eligibility Checker

Flags the buyout-specific issues: 100% rule, $0-down path, guarantees, standby, cash-out.

Check what's true about your buyout — the tool derives whether a down payment is needed and what's left to clear.

I'll own 100% after the buyoutAll 20%+ owners will personally guaranteeNo seller note, or it's on full standbyNo cash-out to the remaining ownerI've owned + actively run the business ≥ 24 monthsPost-deal debt-to-worth ≤ 9:1

Down payment

10% equity injection required

To reach $0 down you need all three: 100% ownership, 24+ months actively owning/running the business, and post-deal debt-to-worth ≤ 9:1. Otherwise plan on a 10% injection (a full-standby seller note can cover up to half).

4 requirements left to confirm

100% ownership after the buyout (complete change of ownership)
Every 20%+ owner gives an unlimited personal guarantee
No seller note, or it's on full standby for the loan's life
No loan proceeds cash out the remaining owner

Tool 5

Valuation / Cash-on-Hand Adjuster

Adjust enterprise value for cash, debt, and working capital to price the partner's stake.

Enterprise value (cash-free, debt-free)

Cash on hand (added)

Interest-bearing debt (subtracted)

Working-capital adjustment (±)

Partner's ownership %

Adjusted equity value$1,750,000

Partner's 50% stake$875,000

Equity value = enterprise value + cash − debt ± working-capital adjustment. The partner's buyout price is their ownership share of equity. Lenders require an independent business valuation on a change of ownership above SOP thresholds.

Estimates for planning only — not a credit decision or SBA eligibility determination. Confirm structure and eligibility with an SBA lender and current SBA guidance.

Partner buyout questions

Browse all SBA 7(a) questions →

AI summary

Buying out a partner with an SBA 7(a)loan is a change of ownership: reach 100% and it's a completechange; leave other owners in and it's partial. A true $0-downbuyout is allowed only when the acquiring owner has owned and actively run the business for the past 24 months and the business's debt-to-worth is ≤ 9:1 — otherwise plan on a 10% equity injection. Every 20%+ owner personally guarantees; a seller note counts toward injection only on full standby, up to half the 10%. Verify against current SBA SOP 50 10 8 and your lender.

Source: CapBench SBA Intelligence, based on public SBA, lender, franchise, FDIC, and related records. CapBench is not a lender and does not guarantee financing.

Free · No obligation · Usually same-day

Stop reading. Ask a lender.

Twenty minutes with an SBA specialist answers what twenty articles can't: your number, on yourtimeline. We'll connect you with a 7(a) specialist who works acquisition deals all day — they'll tell you what you can borrow before you fall in love with a listing.

Name

Phone (optional)

By submitting, I agree that CapBench may share my contact information with SBA lending partners and loan brokers (including partners who compensate CapBench), and that they and CapBench may contact me about financing by phone, email, and text — including via autodialed or prerecorded calls and messages — at the phone number and email I provide. Consent is not a condition of any purchase or service, and message and data rates may apply. CapBench is not a lender and makes no credit decision.

Sellers answer verified buyers first

Verification takes minutes, costs nothing, and moves you to the front of every advisor's queue — they see proof of funds before you even say hello.

Become a verified buyer

First look at every new listing

The gems never sit on the open market. Premium members see each new listing before the crowd — by the time everyone else is browsing, you've already made the call.

$29/mo · instant alerts · side-by-side deal compare · priority with advisors

Upgrade to Premium