The recent SOP updates are pretty good but the game changer is how equity is looked at. These changes will make a ton of deals happen that may have had trouble in he past. DM me or reach out if I can help get a deal to the closing table.

Acquisitions: When purchasing a business that results in a new owner (complete change of ownership), the SBA requires an equity injection of at least 10 percent of the total project costs associated with the acquisition. Seller debt that is on full standby (meaning the seller is not accepting payment of principal or interest) can now be fully eligible as consideration for equity injection.

Startups: Under the new guidance, there is no equity requirement from the SBA for startup businesses. The bank’s internal credit policy will determine the amount of equity injection required for each applicant. ( not sure how many lenders will do this but the ones that do may be very busy)

Employee Stock Ownership Plans (ESOPs): Lenders that have delegated authority can now submit ESOP transactions as such. Additionally, loans to ESOPs for the purpose of purchasing a controlling interest (at least 51%) in the employer’s small business are not required to provide an equity injection.