SIOUX FALLS, S.D. (KELO) — Bankers and brokers across the nation are celebrating a new rule by the Small Business Administration.

Starting in August, any business using SBA loans will be able to buy or sell a portion of a business rather than completely transferring ownership.

Many small businesses get their start thanks to SBA loans.

“The loans are critical, last year we did $116 million in SBA lending, we had about 219 borrowers here in South Dakota,” Bryson Patterson, the U.S. Small Business Administration Deputy District Director of the South Dakota District Office said.

But the SBA recently announced new revisions on the rules for one of its most common loan programs.

“The new SBA rules provide new options for both buyers and sellers so buyers can get into a business now that they maybe otherwise couldn’t have afforded in its entirety,” Sunbelt Business Advisors of South Dakota Business Broker Jill TenHaken said.

“Young people sometimes just don’t have the funds to put down 10 percent or 20 percent to buy that business outright, that used to be what was required prior to this rule change. Now they can buy a portion of the business by 50 percent or 60 percent of the business and not have to buy the whole business all at once,” Patterson said.

The driving force behind these new changes is the increase of business acquisitions happening right now, largely because more people are retiring.

“If you spend some time driving around South Dakota and you visit some of these main street businesses you’ll see a lot of grey-haired people running these businesses, if they don’t have a plan or a buyer to transition that business to the next generation, it may not be there,” Patterson said.

“They can make that transition in additional ways now,” TenHaken said.

Sunbelt Business Advisors helps facilitate many small business sales across the Midwest. South Dakota business broker Jill TenHaken says this change is a win-win for sellers who may not be ready to fully retire and buyers who are looking for some guidance during the transition.

“I’ve had buyers already recognize that when they’re looking at a business and ask, is the seller willing to stay on at 20 percent,” TenHaken said.

“It helps the buyers to have that person who’s seen the business, they’ve seen the ups and downs, to be with them going forward,” Patterson said.

The SBA says they also hope this change helps to bring more buyers to the table to help keep more small business alive, especially in rural America where a retirement can sometimes mean the closure of the community’s only hardware or grocery store.