Hey everyone... Any ideas.

I just had a conversation with the Senior Vice President of a bank for an SBA loan on a business acquisition I'm working to do.

I just sent the following email to some advisors and also wanted to post it here for any other ideas or recommendations as well.

I just got off a call with the Senior Vice President of the Bank of Tampa Bay...

My investors and I CANNOT do an SBA guaranteed loan because of the likely collateral shortfall there would be with the company.

Even with the $2.2 million in manufacturing equipment listed on the books.

The SBA doesn't consider that amount.

They consider the "real value" of the equipment.

Let's say that is $1.1 million just for argument's sake.

They would then halve that amount to about $550,000.

My investors and I would have to then come up with the rest of the collateral from our personal assets - homes, cars, etc - to cover the remaining amount on the loan to cover the loan.

That is a no-go for all of us. I am willing to do a personal guarantee. But they said this is on top of the personal guarantee.

If none of us owned any assets like homes and vehicles this requirement would go away. But because we do, the SBA makes the banks hold these assets as collateral if there is a shortfall.

I will start reaching out to my other investors to see if we can raise the full amount for the purchase.

This is unlikely at this stage.

But the only other way would be to do 10% down and 90% seller financed deal or something along those lines.

Say $500,000 down or about 29% of the purchase price. Then the rest would have to be seller financed.

And the seller already told me he doesn't want to finance more than "maybe" 10% of the deal so this last scenario is highly unlikely.

Unless you can think of any other options these are the two things I can think of to keep moving things forward on the company... or really any transaction requiring SBA financing.