We often receive inquiries from people looking to do partial business acquisitions or to have a seller roll equity in an acquisition when using the SBA loan program. Historically that has not been allowed as the SBA has always required 100% of the ownership interest to change hands when the SBA is financing the acquisition. However, the SBA just announced yesterday the approval of a series of changes to the SBA Standard Operating Procedure ("SOP") which will allow partial changes in ownership going forward. This is a huge change as it will open up SBA financing to many more individuals and businesses that did not qualify before.

Also announced were some changes in affiliation rules as well as the elimination of the franchise directory, which should further open up more businesses and individuals for qualifying for SBA financing who may have been eliminated in the past.

Although the changes have been announced, they do not go into effect until May 11th. Because of that the updated SBA SOP has not been released yet. Once it is released on May 11th we should have a clearer picture on the changes and exactly what will qualify going forward. Just as a warning, many lenders might take a cautious approach on the front end to be sure they can digest and fully understand the changes. But going forward if you plan to look at transactions for a partial buy-out, it appears there is going to be an opportunity to do so using SBA financing going forward.

As always if you have financing questions you can reach us here or directly at --@----.com