Change of ownership

Definition

The SBA's category for a loan that buys an existing business.

Why It Matters

The acquisition-lending figures published from SBA data are filtered to it, and banks underwrite these deals on the target's own cash flow rather than a projection. That distinction works in a buyer's favor, because a business with a provable operating history is a far easier credit than a plan on paper. It also brings its own rules, including how the seller may stay involved afterward and what happens to the seller's existing debt, so knowing a deal sits in this category tells you which requirements will shape the closing. Since October 2026 the SBA's rulebook sorts every change of ownership into one of four kinds in its Appendix 15 before anything else is decided. They are an initial acquisition by a newcomer, a business expansion by an operating company, an owner buyout by the people already inside, and an ESOP or cooperative. The kind sets the injection, the coverage floor and whether a quality of earnings report is required.

In numbers: The SBA files a searcher's purchase as a change of ownership of the Initial Acquisition kind, so its 10% injection cannot be reduced and its coverage must reach 1.25x; the loan-level acquisition counts on this site read the same flag.