Buying Part of a Business With an SBA Loan: Partner Buyouts & Partial Acquisitions

Can You Use an SBA Loan to Buy Part of a Business?

Yes — and it’s more common than most people realize. SBA loans aren’t just for buying an entire company. They can be used for partner buyouts, partial acquisitions, and ownership stake purchases that change the control structure of an existing business.

Whether you’re buying out a retiring partner, acquiring a majority stake in a company you already work for, or purchasing a partial interest from an existing owner, SBA financing can make it happen. But there are specific rules, requirements, and structural considerations that make these deals different from a standard full acquisition.

At GoSBA Loans, we’ve guided hundreds of borrowers through partial acquisition financing. With our network of 50+ SBA lenders and over $320M funded in 2025, we know how to structure these deals for approval — and our service is completely free for borrowers.

How SBA Loans Handle Partial Ownership Changes

The SBA allows its 7(a) loan program to finance changes in business ownership, including partial acquisitions. However, the transaction must meet certain criteria:

• The loan must facilitate a change of ownership: The SBA requires that the transaction results in a meaningful transfer of ownership and/or control of the business.
• The business must be eligible: The target business must meet standard SBA eligibility requirements — it must be a for-profit business operating in the United States, within SBA size standards.
• The buyer must end up with sufficient ownership: While the SBA doesn’t mandate that you buy 100% of a business, the structure of the deal matters. Lenders generally want to see the borrower acquiring a controlling interest (51% or more) or a stake large enough to ensure they have operational authority.
• Fair market value must be established: A professional business valuation is typically required to ensure the purchase price is reasonable and defensible.

The Personal Guarantee Threshold: 20% Ownership

One critical rule that affects partial acquisitions: any individual who owns 20% or more of the business after the transaction must provide a personal guarantee on the SBA loan. This applies to both the buyer and any remaining owners.

This means:

• If you’re buying a 60% stake and the seller retains 40%, both of you must personally guarantee the loan.
• If three partners each own 33.3% and you’re buying one partner’s share, the two remaining owners (each above 20%) must both guarantee the loan.
• If a partner retains only 15%, they would not need to provide a personal guarantee.

This requirement can create complications, especially when the selling partner wants a clean break. Structuring the deal to account for personal guarantee requirements is essential — and it’s one of the areas where expert guidance from a broker like GoSBA becomes invaluable.

Common Scenarios for Partial Business Acquisitions With SBA Loans

Scenario 1: Buying Out a Retiring Partner

This is the most common partial acquisition scenario. A business has two or more partners, and one wants to retire or exit. The remaining partner(s) want to buy the departing partner’s share.

How it works:

• The remaining partner applies for an SBA loan to purchase the retiring partner’s ownership stake.
• A business valuation determines the fair market value of the departing partner’s share.
• The SBA loan funds are used to buy out the retiring partner’s equity.
• The remaining partner now owns a larger share (or 100%) of the business.

Key considerations:

• The business must demonstrate sufficient cash flow to service the new debt while maintaining operations.
• If the retiring partner has been critical to operations, lenders will want to see a transition plan.
• Any remaining partners with 20%+ ownership must personally guarantee the loan.
• The seller may need to carry a standby note (seller financing on standby) to meet SBA equity injection requirements.

Scenario 2: Acquiring a Majority Stake

An employee, family member, or outside buyer wants to purchase a controlling interest in a business while the current owner retains a minority stake.

How it works:

• The buyer acquires 51% or more of the business, gaining operational control.
• The seller retains a minority interest (often 10-49%) and may stay involved in an advisory or limited operational role.
• The SBA loan finances the purchase of the majority stake.

Key considerations:

• Lenders strongly prefer that the buyer has operational control — a 50/50 split is problematic because there’s no clear decision-maker.
• If the seller retains 20%+ ownership, they must personally guarantee the loan, which means their credit and financial situation matter too.
• An operating agreement or shareholder agreement should clearly define roles, responsibilities, and decision-making authority.
• This structure can be attractive because the seller’s continued involvement reduces transition risk.

Scenario 3: Key Employee Buyout

A long-time employee or manager wants to purchase the business from the current owner, either fully or partially.

How it works:

• The employee leverages their institutional knowledge and operational experience to secure SBA financing.
• They may initially purchase a majority stake with a plan to acquire the remaining shares over time.
• The current owner may finance a portion of the deal through a seller note.

Key considerations:

• Key employees often have the strongest applications because they already know the business intimately.
• Lenders view this favorably — there’s minimal transition risk when the buyer has been running day-to-day operations.
• Even with strong qualifications, proper deal structure is essential for SBA compliance.

Scenario 4: Family Succession

A business owner wants to transfer ownership to a child or family member, using SBA financing to provide the selling generation with retirement funds.

How it works:

• The family member applies for an SBA loan to purchase the business at fair market value.
• The SBA requires that family transactions be at arm’s length — the price must reflect true market value, not a discounted “family price.”
• A third-party business valuation is mandatory for family transactions.

Key considerations:

• The SBA scrutinizes family deals more closely to prevent abuse of the program.
• The buyer must demonstrate independent qualifications — being the owner’s child isn’t enough.
• Gift equity (the seller discounting the price as a gift) can count toward the buyer’s equity injection, but it must be properly documented.

Structuring a Partial Acquisition for SBA Approval

Partial acquisitions are more complex than full buyouts from a structural standpoint. Here’s what you need to get right:

Equity Injection Requirements

The SBA typically requires a 10% equity injection (down payment) for business acquisitions. For partial acquisitions, this applies to the amount being financed:

• If you’re buying a 60% stake valued at $600,000 in a $1M business, your equity injection is based on the $600,000 purchase price.
• Seller standby notes can sometimes count toward the equity injection, but they must be on full standby (no payments) for a specified period.
• The equity injection can come from cash savings, retirement account rollovers (ROBS), gifts, or other eligible sources.

Business Valuation

A professional business valuation is critical for partial acquisitions because:

• It establishes the fair market value of the entire business and the specific ownership share being purchased.
• It protects both buyer and seller from overpaying or underselling.
• Lenders require it to ensure the deal makes financial sense.
• For minority discount or control premium adjustments, the valuation methodology matters.

Operating Agreements and Governance

When the transaction results in multiple owners, lenders want to see clear governance documents:

• Operating agreement (LLC) or shareholder agreement (corporation) defining ownership percentages, voting rights, and management authority
• Buy-sell provisions outlining what happens if one partner wants to exit in the future
• Non-compete clauses preventing a departing partner from competing with the business
• Dispute resolution mechanisms to handle disagreements between partners

Challenges Specific to Partial Acquisitions

While SBA loans absolutely can finance partial acquisitions, these deals come with unique challenges:

• Multiple personal guarantees: Getting all 20%+ owners to agree to personal guarantees can be difficult, especially if the remaining owner didn’t want the debt.
• Valuation disputes: Buyer and seller may disagree on the value of the ownership stake, especially regarding minority discounts or control premiums.
• Complex legal structures: Partial acquisitions require more sophisticated legal documentation than full buyouts.
• Lender hesitation: Some SBA lenders are less comfortable with partial acquisitions because of the added complexity. Finding the right lender is crucial.
• Cash flow allocation: The business must support both the debt service on the new loan and distributions to all remaining partners.

How GoSBA Makes Partial Acquisitions Easier

Partial business acquisitions require precision in structuring, the right lender match, and expert guidance throughout the process. This is exactly where GoSBA excels.

Here’s what we bring to the table:

• 50+ lender network: We know which SBA lenders are experienced with partner buyouts and partial acquisitions — and which ones to avoid for these deal types.
• Deal structuring expertise: We help you structure the transaction to meet SBA requirements while satisfying all parties involved.
• Free business plan and financial projections: Every GoSBA client receives a professional business plan and projections valued at $2,500–$5,000. For partial acquisitions, this includes pro forma financials showing how the business will perform under the new ownership structure.
• Over $320M funded in 2025: Our track record speaks for itself. We’ve handled complex deal structures and know how to get them across the finish line.
• Completely free service: GoSBA is free for borrowers — we’re compensated by the lender at closing. You get expert SBA loan brokerage at zero cost.

Steps to Finance a Partial Business Acquisition With SBA

If you’re considering buying part of a business, here’s the process:

1. Determine the deal structure: What percentage are you buying? Who retains ownership? What are the roles post-transaction?
2. Get a business valuation: Engage a qualified appraiser to establish fair market value.
3. Prepare your financial documents: Personal financial statements, tax returns, credit report — the standard SBA documentation package.
4. Develop a business plan: Show how the business will operate under the new ownership structure. (GoSBA provides this free.)
5. Work with a specialist broker: A broker like GoSBA will match you with lenders experienced in partial acquisitions and help structure the application for approval.
6. Negotiate terms: Work with your lender on loan terms, personal guarantees, and closing requirements.
7. Close the deal: Complete legal documentation, fund the loan, and transfer ownership.

Get Started With Your Partner Buyout or Partial Acquisition

Buying part of a business with an SBA loan is absolutely possible — but it requires the right structure, the right lender, and the right guidance. Don’t navigate this complexity alone.

At GoSBA Loans, we specialize in matching borrowers with the SBA lenders best suited for their specific deal type. Whether you’re buying out a partner, acquiring a majority stake, or structuring a family succession, we have the expertise and lender relationships to get your deal funded.

Our service is 100% free. You get access to 50+ lenders, a professional business plan and projections (a $2,500–$5,000 value), and expert guidance from start to close.

→ Contact GoSBA Today to Discuss Your Partial Acquisition ←

Ready to take the next step? Reach out for a free consultation and let’s structure your deal for success.