# Partner buyout

Buying out a partner's stake so one owner ends up holding it all.

Since October 1, 2026 the SBA's rulebook calls this an Owner Buyout and finances it differently from a purchase by a newcomer. The buyers must have worked in the business for at least the last 24 consecutive months and end up holding all of it. The injection is 10% of the purchase price, not of the whole project, and the lender may reduce it or waive it on the business's liquidity and [working capital](https://searchspheresource.com/glossary/working-capital), provided the last fiscal year-end [balance sheet](https://searchspheresource.com/glossary/balance-sheet) shows no negative net worth. Where it is waived, the loan cannot also carry dedicated working capital for 90 days, so any the deal needs comes from the business's own cash or a line of credit. Leftover proceeds paid to the borrower are capped at $10,000 or half a percent of the loan, whichever is greater. The edition before it set a published test instead: 24 months at the same or a higher stake and debt-to-worth no worse than 9 to 1, failing which the lesser of cash to reach that ratio or 10% of the price. That test is gone, and anything quoting it is quoting a rule that has gone.

In numbers: Two 50/50 partners in a $4M company agree on a $2M buyout of one side. The injection is measured on the $2M price, so it starts at $200k, and a lender satisfied with the company's cash position and positive net worth can waive it, which leaves the buyer's cash to close at closing costs.

Source: https://searchspheresource.com/glossary/partner-buyout
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