I am involved with a situation of a small company acquiring a bigger company. I am prospectively providing equity to support the overall transaction. The small company has an existing SBA Loan at present, however the combined transaction will involve a new lender providing the acquisition capital for the purchase of the bigger company and some refinancing of existing debt at the small company.

Does the SBA require that their existing loan be extinguished in this scenario? Or is there a scenario where the SBA loan would exist with the small company post new acquisition and refinancing?

Any insights here would be appreciated; and thanks in advance.