Ownership change
The business is the same, but the names and percentages on it are not. Here is how a funder reads a file after a partner exits or a new majority owner takes over, and how to send it so the change is not a question mark.
✓ Checking what you qualify for does not affect your credit score.
Updated October 13, 2026 · Merchant Fund Express
A change in who owns the business does not erase its history. If the same company keeps operating, with the same entity, the same EIN and the same bank account, a funder still reads its time in business and its deposits from the business itself. What changes is whose credit is pulled, who signs and whether the ownership line is met. The file only gets hard when the change is not explained, or when it leaves no single owner holding enough of the company.
This page is for an operating business where the ownership split moved: one partner bought out another, an investor sold a stake back, or a minority owner became the majority owner. If you bought a whole company from an outside seller, read financing after closing an acquisition instead. If you need money to pay a partner out, that is a different request covered in funding to buy out a partner.
| Situation | How it reads |
|---|---|
| Same entity, same EIN, same bank account | Reads as a continuing business. Time in business continues; the new owner is the credit and signer. |
| The applying owner now holds 50% or more | Meets the Tier 1 ownership line as published (at least 50%), assuming the other lines are met. |
| No owner holds 50% after the change (for example 40/35/25) | Does not meet that Tier 1 line on one owner alone. Raise it before applying so the file is structured correctly. |
| The change is still being negotiated or is not signed | Wait. A funder needs a signed document and a date, not an expected outcome. |
| The departing partner is being paid from the business account | Fits, but those payments are a real obligation and are read like any other debit. |
Sole proprietors are eligible, so a two-partner business that becomes a single-owner business is still readable. Non-profits are not eligible, regardless of who controls them.
Underwriting looks at two things separately. The business record: deposits, balances, negative days, existing positions and age of the company. That carries forward through an ownership change because the account and the company did not change. The owner record: personal credit, bankruptcy history and identity. That belongs to the people who own the business today.
So the departing partner’s 720 score does not stay with the file, and their personal history stops mattering once they are off the ownership. If the remaining owner has a 610, the file is read at 610: below the 650 line for a line of credit or term loan, above the 600 line for revenue-based funding. The reverse is also true: a new majority owner with stronger credit can move a file up a tier, as long as the business record also clears. The full line-by-line sheet is on funding requirements.
A sign shop, an LLC formed six years ago, was owned 50/50. On Wednesday, July 15, 2026, Partner B sold their half to Partner A, who now owns 100%. The business pays Partner B $4,000 a month for 24 months from the business account. Deposits average $68,000 a month. Partner A has a 630 FICO and wants $80,000 of working capital in October.
| Item | Figure |
|---|---|
| Amount approved | $80,000 |
| Fee deducted at funding (illustrative 3%) | $2,400 |
| Net proceeds ($80,000 − $2,400) | $77,600 |
| Factor rate (illustrative) | 1.30 |
| Total repayment ($80,000 × 1.30) | $104,000 |
| Payment | $2,600 a week for 40 weeks |
| First payment | Friday, October 23, 2026 |
| Last payment | Friday, July 23, 2027 |
The weekly payment is about $11,267 a month ($2,600 × 52 ÷ 12). Add the $4,000 buyout payment and the business carries about $15,267 a month in fixed obligations, roughly 22% of $68,000 in deposits. That is the number Partner A should judge, not the advance on its own. With a 630 score the file is read against revenue-based funding, not Tier 1, even though the business is six years old.
All figures in worked examples are illustrations of the arithmetic, not offers or quotes. Real terms depend on your file and the funder.
The application asks for each owner’s ownership percentage. Enter the split as it is now, not as it was. A file that lists the old partner, then shows a transfer agreement removing them, gets sent back. See funding with multiple owners if more than one person remains on the business.
If the buyout payments plus a new advance would push fixed obligations past what the account can carry, borrow less or wait until the payout is further along. If the new owner’s score sits just under 650 and the business already meets every other Tier 1 line, a few months of credit repair can move you onto a line of credit from 1% per month. If the entity itself changed, for example a sole proprietorship became an LLC with a new EIN as part of the reshuffle, read entity changes first, because that can affect how time in business is counted.
Run the free eligibility check with the ownership as it stands today. It starts with a soft credit pull. If it fits, apply with the transfer agreement and statements ready, and use the payment burden calculator to include the buyout payment in your numbers.
Not if the same entity continues with the same EIN and bank account. Time in business belongs to the company. A new entity can change that, so say which case applies.
The credit of the people who own the business now. The departing partner’s score no longer counts for or against the file.
The Tier 1 sheet reads at least 50% ownership. If the split leaves no owner at that level, raise it at the start so the file is structured correctly instead of discovering it at review.
They are a fixed obligation leaving the account, so they are read like any other debit. Disclose them; they are visible on statements anyway.
Once the change is signed and dated. There is no waiting period for a continuing business, but the statements should show the account operating normally after the date.
Same-day decision. Applying takes a few minutes and will not affect your credit score.
