Does anyone have experience with assuming an SBA EIDL loan?

by a searcher from Clarkson University

2 years ago

In the process of acquiring a landscaping company.  As part of the deal, my business partner and I are looking to assume ~$145k of outstanding SBA EIDL debt.  According to a contact at the SBA, this is possible but one of three things can/will happen:

1:  Note is called due upon transfer
2:  25% of the outstanding balance will be due upon the transfer
3:  The loan will be assumed with no changes to rate and term

These are 3 very different outcomes that materially change the terms of the deal.  The SBA rep says option 2 is most likely but not guaranteed.

Has anyone dealt with this type of situation?

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searcher from Clarkson University

Harold - some conflicting information out of. the SBA on the personal guaranty. With a balance of $150k or less the SBA stated there was no personal guaranty to replace.

1 year ago | like reply | 0 likes

searcher from Clarkson University

UPDATE: We successfully transferred the EIDL after negotiating with the SBA. Originally, upon submitting the transfer request, the SBA denied it and said the loan would be called due on the sale/transfer of the business. After explaining the circumstances, SBA allowed the loan to transfer and release the original guarantors with a 25% down payment on the outstanding principal. We successfully negotiated the down payment to 10% of the balance. Overall a relatively simple albeit lengthy process. Thanks @JakeParsley, we certainly took the "catch more flies with sugar" approach when negotiating with the SBA.

1 year ago | like reply | 1 like

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