CAPEX need after maxing out SBA 7a

searcher profile

February 19, 2024

by a searcher from Harvard University - Harvard Business School in Dallas, TX, USA

Hello all,

I was wondering if anyone has experience financing fairly significant CAPEX (~2M) shortly after closing a deal that uses all avialable 5M in SBA 7a lending. Usually I see term sheets that don't allow for additional loans but perhaps asset based lending is possible? Maybe it's possible to structure a pari passu position that acts almost like a revolver? Curious if there are any creative ways to accomplish this presuming there is a compelling story to justify the additional investment. Thanks!

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commentor profile
Reply by a lender
from California State University, Sacramento in Seattle, WA, USA
The best possible process would be to have the capex considered as part of the acquisition process. Considering adjusted ebitda including cap ex and then making sure your loan structure includes cap ex needs. Happy to talk offline about the reasons the cap ex is to be considered separately after close.
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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
I agree with Lisa that it is best to include it up front. But there are some ways to finance CAPEX post closing so long as the cash flow is there to support it. Happy to talk about alternative funding at redacted Good luck.
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