Closing costs & bonuses

searcher profile

July 22, 2022

by a searcher in Chicago, IL, USA

I had a conversation with a banker yesterday regarding a Healthcare deal I have in diligence and he said that I was not able to include Accounting, Attorney or Bonus fees in the transaction.

It is a $3,000,000 transaction and I wanted an extra $300,000 to pay closing fees with. Do banks generally allow closing costs and management bonuses to be added to loans?

I thought that this was standard practice.
Thank you

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commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
You can include transaction costs in an SBA 7A loan. However, not all lenders will allow it. It sometimes depends on what those costs are being used for. If there are bonuses you intend to pay to keep key employees, that would usually come out of working capital. If you need assistance packaging the loan and getting it in front of the right partners, we can certainly assist you. We are a Bank Consulting and Commercial Loan Brokerage shop with over 350+ funding partners and over 50+ funding partners on the SBA side. You can reach me directly at redacted
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Reply by a lender
from University of Wisconsin in Milwaukee, WI, USA
In nearly every business acquisition, I include a line item in the sources and uses of the loan for due diligence costs. I would consider any bonuses you would want to pay as part of cash working capital which we would also provide within the loan structure. Feel free to call me directly if you'd like to discuss further###-###-#### Hope this helps!
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