Loans for a down payment only?

by a searcher from University of San Francisco

2 weeks ago

I'm working with a seller who is willing to do a significant seller note over quite a few years. However, the down payment he is likely going to ask for is more that I can handle. 

Are there alternative types of loans (to SBA) that would make sense here, for the purpose of covering the down payment only?

(SBA is a great program, but the approval timeline isn't going to align with our target close date)

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21 comments

intermediary from Clemson University

By SBA guidelines, the down payment cannot be borrowed. The only options for a loan with an SBA guarantee is to season the funds for a minimum of 90 days or include the individual as an equity owner and co-guarantor on the entire note, OR instead of the seller providing traditional seller financing utilize the current (as of 8/1/2023) program whereby the seller puts 10% of seller note as buyer equity (down payment). This 10% will be on full standby for the first 24 months of the 10-year term. I do not anticipate this program is going to last, but technically it's available now and the seller would receive 90% of the purchase price at closing.

5 days ago | like reply | 0 likes

searcher from University of Technology Sydney

Take over the business first subject to financing at different stages and then get a business loan as a director of that business and then pay the downpayment to the seller. Of course, if the seller is willing to do so. Please let us know if the seller accepted that offer/terms.

6 days ago | like reply | 0 likes

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