Two New SBA Rules Every Business Buyer Must Know in 2025

If you’re in the process of buying a small to medium-sized business in 2025—or even just beginning your search—there are two pivotal SBA guideline changes that will significantly shape how you structure your deal. 1. Seller Guaranty Now Required for Equity Rollovers As of 2025, if a seller wants to roll equity and retain any ownership interest in the business post-closing, the SBA now requires that they personally guarantee the SBA 7(a) loan for two full years after closing. This is a major shift in risk allocation and has already influenced how sellers are approaching partial exits and earnout-style structures. 2. Only Two Options for Down Payment Structures Effective June 1, 2025, the SBA has tightened rules on acceptable sources for the required 10% equity injection: ✔️Option 1: The full 10% must come from buyer and/or investor cash. ✔️Option 2: A split structure with 5% from buyer/investor cash and 5% from a seller note—but only if that note is on full standby for the life of the SBA loan (i.e., no payments whatsoever until the SBA loan is fully repaid). If you’re just kicking off your search and want to ensure that the deals you pursue are SBA-eligible before you sign an LOI, Pioneer Capital Advisory would love to connect for a brief pre-LOI consulting call. We can walk you through the latest guidance and help you think strategically about capital structure, seller expectations, and financing readiness. Book time with our team here: https://calendly.com/rafael-pioneercap/30min or reach out: redacted