If your business generates $2M–$25M in annual revenue, you're looking to buy out a partner (or have a partner who wants to exit), and the business has steady cash flow, this is likely a fit for SBA financing. The best way to find out is a quick confidential call.
I've worked with partners who weren't speaking to each other. The key is that both parties agree separation is the goal. If you're both committed to resolving this professionally, we can usually find a path forward.
Every owner and guarantor, including a partner who is leaving, must be a U.S. citizen or U.S. national with their primary residence in the United States at the time the SBA loan number is issued. Green card holders and visa holders don't qualify. If any partner falls outside this, talk to me early, because the timing rules are strict.
This is common. I estimate the value using valuation software relied on by 250+ banks, which gives both partners a credible starting point. The lender will also order its own independent business valuation, which SBA requires on every partner buyout, and the financing can't exceed that number. Agreeing on a price the lender's appraisal will support saves you from renegotiating later.
Check how it defines earnings. I've seen two partners use the same formula and land $1M apart because the agreement never said whether "earnings" meant reported or adjusted EBITDA. Whatever the agreement says, the lender's independent valuation sets the maximum SBA can finance.
SBA financing can cover 90% to 100% of the buyout price, so the buyer doesn't need to come up with the full purchase price and the seller doesn't have to hold a note. The standard equity injection is 10% of the purchase price. The lender can reduce or waive it if the business will have enough cash and working capital after closing and doesn't show a negative net worth. If the person taking control hasn't worked in the business for at least 24 months, the 10% can't be waived. When it is waived, any extra working capital has to come from existing cash or a line of credit rather than the buyout loan.
Often, yes. If a partner who no longer works in the business has been taking a share of the earnings, that money can go toward the loan payment instead. In one recent deal, an operating partner bought out a 60% silent partner for $2M; the $500K a year that went to the silent partner covered $300K of loan payments and left $200K more for the operating partner. This works best when the departing partner isn't running a major part of the business.
I help structure the deal to meet SBA 7(a) requirements, then match you with the right SBA lender. With direct relationships with 50+ SBA lenders, I know which lenders are doing which deals in which footprint. I help you submit a complete package and walk you through the process, including making sure the lender's independent appraiser gets complete, accurate financials. The business portion of the loan amortizes over 10 years, and a 10-year loan carries no SBA prepayment fee.
Usually not. SBA exempts partner buyouts from its Quality of Earnings requirement at any size. The exception: if the person taking control hasn't worked in the business for at least 24 months and the purchase price is $3 million or more, the deal follows standard acquisition rules and a QoE is required.
Yes. A departing partner can stay on as an owner or employee. If they keep less than 20% after the sale, they must personally guarantee the full loan for at least two years after closing, and they can be released only if the loan has been current for the prior 12 months.
Yes. If the business, any owner of more than 20%, an officer or director, or another business any of them controlled defaulted on a federal loan that cost the government money, the deal can be ineligible. That can include people who aren't guaranteeing the loan. Check every remaining owner and officer early, not just the buyer.
You owe me nothing. I'll tell you quickly if a deal won't work. I'd rather save you time than string you along. If terms can't be agreed upon, you walk away at no cost.
Your attorney will still draft the purchase agreement. I estimate value and assess financing upfront, so you don't spend money on legal and appraisal fees for a deal that was never financially feasible. I complement your attorney; I don't replace them.
Most deals close within 60–90 days from the time pricing and structure are aligned. The timeline depends on how quickly both partners agree on terms and how smoothly underwriting goes.
Anytime a client mentions a partner who wants out, a valuation disagreement, or the desire to buy out a co-owner. You don't need to diagnose the situation, just make the intro and I'll take it from there.
I'll schedule a confidential call with your client to understand the ownership situation, assess feasibility, and outline potential next steps. You'll stay informed throughout unless your client prefers otherwise.
Absolutely. With your client's permission, I'll keep you updated on progress. Many coaches find it helpful to stay involved so they can support the client through the emotional side of the transition.
Not at all. That's my job. Make the intro and I'll handle the value estimate, structure, lenders, and financing, and I'll tell you quickly if SBA financing isn't a fit.
Any situation where one partner wants to buy out another, whether it's amicable or tense, majority or minority stake, in a business generating $2M to $25M in annual revenue with enough cash flow to support SBA financing. I'll quickly tell you if a situation isn't a fit.
No. There are no upfront borrower fees. Lenders pay when the deal closes. Your client has zero financial risk in starting the conversation.