I’m looking into a deal where the seller will carry a large note (50%). If I am wanting to use SBA, can I have the seller note count as my equity injection (assuming I do have relevant experience in the industry) and have structured forgivable seller note (only decreasing, not increasing)?
Forgivable Seller Note and SBA Rules
by a searcher from Emory University
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Straight-line amortization after that initial period, no bullet repayment.
No forgiveness clauses or complications.
https://www.sba.gov/sites/default/files/###-###-#### /###-###-#### %20Information%20Notice%###-###-#### %20on%20Issuance%20of%20SOP%2050%2010%207.pdf
You can always split the Seller Note you have negotiated into different underlying securities, perhaps one more traditional in nature (with any performance-related forgiveness clauses attached to the trad note).
The best lenders in my experience will want to see ~5% of the equity come from you + your investors if any.