Looking for conventional lender to buyout SBA 7A

January 27, 2021

by an investor from The University of Arizona - Eller College of Management in Chicago, IL, USA

Hey All,

I'm an active investor in a behavioral healthcare business in the PNW. The business has a 2.5 year old SBA 7A loan with a balance of about $1.9MM. Business did $1.2MM of EBITDA in###-###-#### I'd like to refinance the loan with a conventional product and curious what is out there. We are sensitive to prepayment penalties and also need the covenants to be friendly in terms of either distribution or CapEx investment. Thanks in advance!

Reply by a lender
from University of Missouri in St. Louis, MO, USA

Rob, the premise of the SBA loan is usually a shortfall in collateral. We have refinanced several of our own 7A loans conventionally. However the generul rule is that they are now within asset coverage (business, personal or combined) that no longer makes the SBA loan necessary. so if you are looking for a bank loan that would usually require about $2- $2.5M in collateral. If that is the case then you would be able to refinance the SBA loan. email me if you would like to set up a time to discuss redacted

Reply by a searcher
from Harvard University in 1970 Walton Dr, Burlington, WA 98233, USA

I'm in the PNW as well - check out Pacific Premier Bank (formerly Opus). I know that they have appetites for deals like you describe.

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