What SBA SOP 5010-8 Means for Your Business Sale or Acquisition

If you’re buying or selling a small business in 2025, the latest SBA policy update—SOP 5010-8, and the new associated SBA lending rules—needs to be on your radar. In a recent interview, I spoke with Lane Rhodes, a senior lending officer at Live Oak Bank, to unpack the most important changes and how they affect your next transaction.

Key Changes in SBA SOP 5010-8

1. Return to Pre-COVID Standards. Many of the temporary fee waivers and relaxed underwriting rules from the pandemic era are gone. Expect a return to more conservative, sustainable SBA lending.
2. 10% Equity Requirement Is Back. Buyers must now inject a minimum of 10% equity. Seller notes can count for up to 5%, but only if they’re on full standby for the life of the SBA loan.
3. Franchise Registry Is Back. If you’re buying a franchise, make sure it’s listed in the SBA Franchise Directory. Deals are currently delayed while franchisors catch up.
4. Citizenship and Ownership Transparency. SBA now requires documentation for 100% of ownership — direct and indirect. If you’re backed by a fund, every investor must be a U.S. citizen or lawful permanent resident.
5. Liquidity Testing Is Quietly Returning. The SBA’s personal resource test is being informally used again. If you (or any 20%+ owner) have liquid assets more than 1.5x the loan amount, you may not be eligible.
6. Clean Books and Strong Teams Matter More Than Ever. Sellers: clean financials and reduced owner dependency are critical. Banks and buyers will scrutinize declining trends, customer concentration, and excessive addbacks.

How Sellers Can Prepare

Advice for business owners from the new SBA lending rules:

• Keep financials updated monthly — not annually
• Eliminate addbacks and lifestyle expenses early
• Reduce reliance on the owner and key customers
• Get current on franchise registration
• Engage a lender early to avoid surprises

Final Thoughts

SBA SOP 5010-8 isn’t something to fear — it’s a set of clearer rules that support good deals.