Brokers pushing for smaller deals

by a searcher from California Polytechnic State University - San Luis Obispo

1 year ago

Hey all, I've been searching for about 1 month now and several brokers I've reached out to have consistently been pushing me to look at smaller deals (~500k in price with 150k-200k SDE). 

Every time I bring up a deal at 3mm-5mm range with corresponding SDE, even with me being able to put in 10-20% equity, they tell me that SBA will likely shut it down due to my lack of industry experience and/or I don't have the collateral via equity of my home to be able to support the SBA loan. 

I'm not sure if it's just these brokers are trying to make a quick sale on the smaller deals or if the space has changed enough where I need even more collateral to be able to finance a deal. 

Any insight is appreciated.

9 likes
1038 views
119 comments

searcher from Rutgers-The State University of New Jersey-Camden - Rutgers School of Business

The SBA program will use what collateral you have, but there is no minimum requirement and banks are not supposed to deny you because of lack of collateral. Direct experience should not be a problem either, as long as you can show that you understand the business you are buying and have the skills to manage it.

10 months ago | like reply | 0 likes

intermediary from Clemson University

Questioning the brokers intent is ridiculous. Why would a broker push a smaller deal on a qualified buyer of a larger one? Get an SBA pre-qual letter. That will answer all your questions.

10 months ago | like reply | 0 likes

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