SBA SOP 50 10 8.1, App15.A.2 — Personal Guaranties
Verbatim text of SBA SOP 50 10 8.1 (with Technical Policy Updates) section App15.A.2 (Personal Guaranties). Effective 2026-10-01 for applications received by SBA on or after that date; SOP 50 10 8 governs applications submitted through 2026-09-30. 4 provision(s) quoted from SBA's .docx.
SBA lending corpus: SOP 50 10 and the active notices, with the expiry watcher.
Verbatim regulatory text
Verbatim provisions from SBA SOP 50 10 8.1, App15.A.2 — Personal Guaranties — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
SOP 50 10 8.1 App15.A.2
2. Personal Guaranties All owners of the Applicant business, and the business being acquired, if it is a Co-Borrower, are subject to the requirements for guaranties in Section A, Ch. 5, Para. A, Guaranties. For 7(a) change of ownership transactions, except those that involve a selling owner who will retain an indirect or direct ownership interest less than 20%, which must comply with the previously stated guaranty requirements, the percentages for determining who must provide a guaranty will be based on the post-sale percentage of direct and/or indirect ownership in the business. Additional guaranty requirements specified in this Appendix will apply to all change of ownership transactions.
SOP 50 10 8.1 App15.A.3.a
3. Uses of Proceeds Change of ownership transactions are subject to the following restrictions on Use of Proceeds. a. Debt Refinancing i. Debt used to finance a change of ownership of a going concern business; a) To be eligible for refinancing, any seller-financed Note must have been in place and current (not on standby) for at least 36 months following the change of ownership. The refinancing request must meet the SBA’s 10 percent improvement to installment payment amount requirement and must not reduce the Lender's exposure. b) If the change of ownership is between existing owners of a business and existing business debt will be refinanced as part of the transaction, the refinancing must meet the requirements set forth in Appendix 14: 7(a) Debt Refinancing Requirements. c) Paying off existing business debt as part of an Initial Acquisition is not refinancing of debt under Appendix 14. The debt payoff must be included as part of the change of ownership transaction and must meet the requirements set forth in this Appendix.
SOP 50 10 8.1 App15.A.3.b
b. Restrictions on Uses of Proceeds in Change of Ownership Transactions 13 CFR § 120.130 Loan proceeds may not be used for any of the following purposes (including the replacement of funds used or borrowed for any such purpose): Payments, distributions, or loans to an Associate of the Applicant (as defined in 13 CFR § 120.10), except for compensation for services actually rendered at a fair and reasonable rate or to facilitate 7(a) loans for changes of ownership in accordance with 13 CFR § 120.202 and the guidance in this Appendix in Para. A.1.c.ii. Owner Buyout - Partial Change. i. Change of ownership transactions may include funds for: a) Working Capital; b) Borrower out of pocket expenses (including business valuations and QoE); and c) Owner-Occupied Commercial Real Estate when structured on a blended basis.
SOP 50 10 8.1 App15.A.4.a
4. Specialty Transaction Structures for Changes of Ownership a. Eligible Passive Companies (EPCs): i. An EPC may only use loan proceeds to finance a change of ownership between existing owners of the EPC when the real estate or personal property has been held by the selling owner(s) for at least 36 months. ii. 7(a) loans may not fund a partial change of ownership in an EPC for a business structured as an EPC/OC due to the regulation at 13 CFR § 120.111. However, 7(a) loans may be used to fund an Owner Buyout – Partial Change of Ownership in the Operating Company of a business structured as an EPC/OC.
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