Ownership transitions are a natural part of business growth. Whether due to retirement, strategic restructuring, or shifting priorities, partner buyouts can create both opportunity and complexity.

What many business owners and lenders do not realize is that the SBA 504 program can be used to facilitate certain partner buyouts when structured properly.

What Is a 504 Partner Buyout?

A partner buyout occurs when an existing owner or owners purchase the ownership interest of another partner within the same business entity. The transaction can be structured as either:

• A stock purchase

• An asset purchase

When the buying party is already an existing owner and the selling partner fully divests from ownership and management responsibilities, SBA 504 financing may be an option.

How SBA 504 Supports Ownership Transitions

The SBA 504 program can finance eligible long-term fixed assets, including:

• Owner-occupied commercial real estate

• Major equipment

• Renovations or improvements

• In some cases, additional equipment purchases as part of the project

This structure allows business owners to:

• Secure long-term fixed interest rates

• Reduce exposure to variable-rate debt

• Maintain operational continuity

• Position the business for long-term stability

Ownership transitions can be complicated. The right financing structure helps ensure the transition strengthens the business rather than disrupts it.

Is a 504 Partner Buyout Right for Your Business?

This option is best suited for:

• Established, stable businesses

• Owner-occupied real estate

• Situations where the selling partner fully exits ownership and management

• Buyers focused on long-term planning and risk reduction

Each situation is unique. We work closely with lenders and borrowers to determine whether a 504 partner buyout structure is appropriate.

If you are considering an ownership transition, connect with our team to explore your options.