From SBA’s perspective equity is supposed to be equity without a designated repayment schedule. However as long as the business is making its sba loan payments as agreed and the business cashflow appears adequate, there is generally no prohibition against reasonable dividends and disruptions being paid. Under strict interpretation, SBA might construe formal written agreements on guaranteed distributions as debt so be mindful. Happy to discuss directly. redacted

In addition to being sure you follow your loan covenants, it might be a good idea to discuss the options thoroughly with your investors and your accountant before deciding. Aligning everyone's goals and expectations is a big part of the "correct" solution, since everyone's situation is slightly different. There are many different ways you can use your profits and cashflow. Your CPA (and other advisors) can help you understand the advantages/disadvantages of returning capital versus paying distributions versus accelerating debt repayment versus internal investment.