If you’re a small business owner thinking of selling, or a buyer exploring SBA financing to acquire a business, the rules of the game are about to change. Starting June 1, 2025, the SBA’s updated Standard Operating Procedure (SOP 50 10 8) introduces new lending guidelines that will significantly impact how deals are structured and approved.
Here’s what you need to know — and how it affects you:
1. Buyers Must Bring More Cash to the Table
Buyers are now required to inject a minimum of 5% of the total purchase price in cash. While seller financing can still make up an additional 5%, it must be on full standby — meaning no payments (including interest) can be made to the seller until the SBA loan is fully repaid.
Impact:
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Buyers will need stronger liquidity or third-party investors.
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Sellers should anticipate longer timelines to receive seller-financed payouts and may need to reconsider how they support the buyer during the transition.
2. No More Partial Buyouts or Equity Rollovers
The SBA will no longer allow deals where sellers retain any portion of ownership post-sale — unless structured as a stock purchase. Asset purchases with seller equity rollovers or phased transitions are no longer eligible.
Impact:
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Buyers lose flexibility on phased-in ownership deals.
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Sellers must decide between a clean exit or staying involved under a more rigid structure.
3. Seller Guarantees Are Now Required in Some Cases
If a seller retains less than 20% ownership, they must now personally guarantee the SBA loan for two years after the transaction.
Impact:
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Sellers face personal liability if they remain involved, which may discourage partial-retention structures.
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Buyers may need to pursue full buyouts to simplify the transaction and reduce seller risk concerns.
4. SBA Eliminates the Personal Resource Test
Buyers will no longer be disqualified based solely on personal liquidity. Instead, the SBA will evaluate total cash flow, including income from spouses, rental properties, and investments.
Impact:
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Buyers with strong financial profiles — but significant personal assets — now have a clearer path to approval.
5. CPA-Prepared Financials Now Accepted
SBA lenders can now rely on CPA-reviewed or compiled financials, even if the tax returns don’t paint the full picture. This creates more flexibility for businesses with complex deductions or post-pandemic adjustments.
Impact:
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Sellers with accurate, well-documented financials (even if tax filings are lower) can now appeal to a broader range of SBA-backed buyers.
What This Means for Buyers
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Start early: Ensure your liquidity, credit, and documentation meet the new SBA expectations.
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Be strategic: Some creative deal structures will no longer qualify — be ready to adapt.
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Build the right team: Partner with experts like VR Business Sales Atlanta, who understand SBA rules, deal structures, and buyer preparation. The right broker can save you time, reduce risk, and position you for a smoother close.
What This Means for Sellers
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Get your financials in order: Now more than ever, CPA-reviewed books can improve buyer confidence and loan approval odds.
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Rethink your role: If you hoped to stay involved post-sale, you’ll need to consider full exits or more formal stock-sale agreements.
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Choose your buyer wisely: Work with buyers (and brokers) who are well-versed in SBA transactions under the new rules to avoid delays or failed deals.
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Work with experienced advisors: At VR Business Sales Atlanta, we help sellers position their business for success under changing SBA regulations — from valuation to deal structure to closing.
Conclusion:
These SBA 7(a) loan changes will reshape how small business acquisitions are financed — placing more emphasis on cash equity, clean financials, and expert deal planning. Whether you’re buying or selling, now is the time to align with professionals who can help you navigate the updated landscape.
If you’re preparing for a business transition in 2025, let’s talk. VR Business Sales Atlanta is here to help you succeed in this new environment.