Banks with low downpayment

by a searcher from George Mason University

2 months ago

So on my deal at $3.4M via SBA 7(a) I have a 10% sellers note and the bank approved me to just put 2.5% in.

i see so many brokers saying “you need at least 10%”, and tons of buyers mentioning 10-20%

im curious why more banks aren’t offering the 2.5% to draw in more business? Its been allowed for over a year

1 like
274 views
12 comments

searcher from University of Texas at Austin

Thanks for sharing, I wasn't aware.

2 months ago | like reply | 0 likes

lender from The University of Michigan - Stephen M. Ross School of Business

Pretty comprehensive explanation from Brad H which I agree with. Industry experience is key in this scenario-does the buyer have direct industry or transferable experience? (has he/she managed a P&L and been responsible for payroll?) Strong personal credit and low personal leverage for the buyer? Reasonable level of fall-back liquidity post close? Respectable personal net worth? outside income from a spouse? .... Many factors go into making a credit decision which makes things interesting and fresh for SBA loan officers but can be a challenge for buyers.

2 months ago | like reply | 0 likes

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