Yes, two or more people can buy a business together as partners, typically through a jointly owned LLC or corporation, and SBA 7(a) loans allow multiple owners. Each partner who owns 20% or more must personally guarantee the loan. The single most important step is a written partnership agreement that spells out ownership splits, roles, money, and an exit plan before you close.
How co-ownership works
Partners form a single entity that buys and owns the business. That entity is the borrower on the SBA loan; the partners are the guarantors. Ownership can be split any way you agree:
| Split | Often used when | Guarantee |
|---|---|---|
| 50 / 50 | Equal capital and equal roles | Both guarantee |
| 60 / 40 | One partner leads or funds more | Both guarantee (each ≥20%) |
| 80 / 20 | One operator, one passive/minority | Both guarantee at exactly 20% |
Who has to guarantee the loan
On an SBA 7(a) loan, any owner with 20% or more must sign a personal guarantee, meaning personal liability for the debt. A partner under 20% may not be required to guarantee, though lenders can still ask. See the mechanics in our personal guarantee guide.
The agreement that prevents disasters
Most partnership breakups come from things left unwritten. Your operating or partnership agreement should cover:
- Ownership percentages and capital contributed.
- Decision-making and who has final say on what.
- Salaries, profit distributions, and reinvestment.
- Dispute resolution.
- A buy-sell clause, what happens if a partner wants out, dies, or is bought out.
Read more in buying a business with a partner, and structure the entity with your attorney and the right tax setup.
Frequently asked questions
Yes, as partners through a jointly owned LLC or corporation. SBA loans allow multiple owners; each with 20%+ personally guarantees. Put a partnership agreement in writing first.
Any owner with 20%+ must sign a personal guarantee on an SBA 7(a). Under 20% may be exempt, but lenders can still require it depending on the deal.
Any way you agree, 50/50, 60/40, or by capital and role. What matters is a written agreement covering decisions, pay, distributions, and a buy-sell clause.
