ADDITIONAL SBA FINANCING AVAILABLE ABOVE $5MM PER BORROWER

September 19, 2024

by a lender from Loyola University of Chicago in Beverly Hills, CA, USA

New SBA rules allow for borrowers to borrower more that $5MM if the business you're going to acquire is in a different NAICS code (first 3 digits have to be different) than the business you have used for your last SBA loan. The old rule only allowed a borrower to borrow up to $5MM, without exception.

Now there is more flexibility. Reach out to me for more info. redacted

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

This post is not 100% accurate. The new rule is very confusing and it has many people confused about what is possible. If you are the primary guarantor or have a controlling interest in a business with SBA debt and have used up your $5 million in availability, you do not have access to another $5 million in SBA exposure. If you are a minority investor, above the 20% but below a controlling ownership, or the spouse of someone who has hit their $5 million limit, then you would have an additional $5 million in capacity when buying another business either as the minority owner or the controlling owner if in a different NACIS code. But once you have hit your limit as a controlling owner, there is no more SBA financing available to you. You cannot go out with controlling interests in businesses and continue to rack up more SBA debt above $5 million. I hope this helps to clarify.

Reply by a searcher
from Bryant University in Los Angeles, CA, USA

Brad - thanks for the clarification. Are you suggesting that the spouse of an owner that has maxed out the $5M SBA limit can now take out a separate $5M SBA Loan? So $10M in SBA financing for both husband and wife?

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