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.

In numbers: The SBA files a searcher's acquisition as a change of ownership: the 10% injection rule, the seller-standby treatment, and the loan-level acquisition counts all key on that flag rather than on startup lending.