Pragmatically speaking, the new changes didn't change much if you're referring to equity capital from external investors. They still need to own <20% to avoid the PG, and any payments to them can't take priority to the SBA (or it's guaranty). Most deals are structured as participating preferred + 1x liquidation pref. While that means investors get their initial invested capital back, it can't/shouldn't take seniority to any debt payments. And plus, those distributions are typically at the discretion of the Searcher to pay out... though, they’re generally incentivized to do so given there’s a preferred return attached to the outstanding balance (that typically accrues). My understanding is that the changes were trying to root out bad behavior, like side agreements, onerous put options, etc.

Given these updates, private capital can still participate, but only under very strict circumstances: No preferential control or payouts—investors must take real upside risk and cannot embed protection mechanisms. The searcher must maintain both control and guarantee. Seller notes are severely restricted—they must be full standby for the life of the loan, and even then can only cover up to 50% of the equity injection. Partial retention or rollover by sellers is highly cumbersome, requiring guarantees and co-borrower status the seller might be unwilling to accept.