# Can an outside investor buy in through an SBA owner buyout?

**Short answer:** Yes, within limits. A person employed by the business for fewer than 24 months may acquire less than 50% and cannot become the largest shareholder. Otherwise the deal follows Initial Acquisition credit standards. Source: SOP 50 10 8.1, App. 15, Para. A.1.c.

Canonical page: https://www.sbaexpress.loans/answers/outside-investor-owner-buyout-sba-limits/
Last checked: 2026-11-08

Yes, but the deal stays an Owner Buyout only within limits. SOP 50 10 8.1, Appendix 15, Para. A.1.c, restricts individuals not employed by the business for at least 24 months. They may acquire only less than 50% of total equity. They may not become the largest direct or indirect shareholder.

## How ownership is counted

Indirect interests held through any entity count together with direct ones. That includes holding companies, trusts and limited partnerships.

## If the limit is exceeded

The deal must meet the Initial Acquisition credit standards for coverage, equity and Quality of Earnings. The seller may still remain as an owner and employee.

## What the new investor takes on

- Any new owner must be a co-borrower, at any percentage (Para. A.1.c.ii).
- New indirect owners must also personally guarantee the loan.
- Anyone holding 20% or more after the sale gives an unlimited full guaranty (Para. A.2).

## Eligibility and control

SBA's citizenship and residency rule applies to every direct and indirect owner (Section A, Ch. 1, Para. F). A side agreement giving a non-guarantor owner or investor control makes the business ineligible (Section A, Ch. 1, Para. E).

## Lender review

The lender must underwrite and review the terms of all other debt and equity investments (Para. A).

## Sources

- [SOP 50 10 8.1, App. 15, Para. A.1.c (about pp. 365-367)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, App. 15, Para. A (about p. 364)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, App. 15, Para. A.2 (about p. 368)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, Sec. A, Ch. 1, Para. F (p. 28)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, Sec. A, Ch. 1, Para. E, Passive Businesses (about p. 19)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)