$ 3M - $5M deal / SBA 7A Loan New SOP == Sellers notes as equity injection

professional profile

March 23, 2024

by a professional from University of Mississippi in United States

SF Community ~


Our team is looking to make a deal this year between $ 3M - $5M, this year!


There is a 'new' SOP which has been released by the SBA which our team is looking to exercise for an acquisition this year.


For context --


- Specifically, the SBA 7a, citing the equity injection requirement (sponsor common) can be met with a seller's note

- The seller's note would be on full-standby or partial - standby for 24 months, with SBA being Sr. debt in the deal.

- The seller's note note cannot include a balloon payment

- Of course, the projected cash flow must be sufficient to cover the combined SBA loan and seller note payments


I would welcome connecting with buyers and sellers who have utilized this allowance to execute deals.


Also, welcome ^lenders who have utilized this as part of a deal structure to close deals with a $3M -5M SBA 7A loan.


Feel free to respond to this thread, DM to discuss and share with your network.


- SBA publication reference , Link here -- > SBA Form###-###-#### ~ Page 5


Thanks, and happy hunting!


~ Ahsan


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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
^redacted‌. Thank you for noting me on this one. Yes, we have used this structure for deals. However, we have found most lenders still want some sort of equity injection from the buyers, except in some circumstances. Also, the metrics on the deal have to work no or limited cash down as well. Happy to have a discussion with anyone interest in looking at an opportunity under this structure. You can reach me here or directly at redacted
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Reply by a searcher
from University of California, Berkeley in Seattle Metropolitan Area, WA, USA
Happy to connect - what do you want to know? Getting these deals done was very dependent on the individual deal structure and cash flow profile, along with checking the box for each lender to be able to fit into their credit profile.
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