Likelihood of a combination of seller's financing and SBA 7a lending

by a searcher from University of Arkansas at Fayetteville

4 years ago

I have negotiated a seller to 20% seller financing. I intend to get the other 80% from SBA 7a financing, but it is a requirement of an LBO that  the bank get paid first. My SBA lender is telling me that very few sellers will do that. In your experience, is this a sticking point? Is there a way around this or a way I could sweeten the pot?

3 likes
290 views
19 comments

lender from University of Utah

Happy to discuss from a bank perspective. --@----.com or###-###-####

2 months ago | like reply | 0 likes

lender from University of Missouri - Columbia

100% leverage (even if allowed) would be pretty tough to cash flow unless you bought at a low multiple. 5% cash/5% fully subordinated seller note is possible. That is still high leverage though so make sure cash flow supports that level of debt.

4 years ago | like reply | 0 likes

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

Examples of self-funded searcher websites

Investor seeking Self-Funded Search Deals

What are market terms for Seller Notes?

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.