Does anyone have a list of banks that allow equity rolls? above SBA limits

July 21, 2023

by a searcher from University of Massachusetts Amherst - Isenberg School of Management in Boston, MA, USA

I know the SBA is the preferred lending program for this cohort but given that the SOP might change the situation on equity rolls. I am curious if anyone has curated a list of LMM lenders that normally do $5-15mm EV deals with equity rolls.

It is more a PE lender than what I have seen people discuss here but trying to save myself the effort of manually calling a bunch of banks.

If anyone knows someone or has a list they are willing to share, that would be great! Thank you!

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

We are a Commercial Loan Brokerage Shop and we have over 500 funding partners. We do have conventional lenders and non-bank lenders that will allow a seller roll over of equity, and we would be more than happy to look at anything you are working on. You can ping me here or directly at redacted

Although the SBA guarantee requirement might be changing for sellers (that is still be negotiated), just for clarity the SBA does not allow a traditional seller roll-over currently. In essence under the partial acquisition rules you need to buy into the existing company and that company is the borrower on the loan, and the seller retains a portion of the equity in the original company. Seller roll-overs are not allowed. They are seen as full business acquisitions and the seller cannot buy back in if you do a full business acquisition. I hope this helps to clarify.

Reply by a searcher
from Emory University in Atlanta, GA, USA

Ryan, I have exactly the same goal. Two SBA lenders have confirmed that the new SOP essentially requires sellers to provide personal guarantees if we use the new partial change of ownership rule. I hope this post gains traction.

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