Multiple Seller Notes/Full Standby

by a searcher from George Washington University

1 year ago

Hi, I'm investigating potential deal structures and I'm curious about multiple seller notes vs. 1 seller note. Under the SBA, you can meet the 10% equity injection through a 5% full-standby seller note. Is it common/allowed for multiple seller notes to be present on a deal (i.e., one note is 5% full standby, another note is X% non-standby)?

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lender from Pennsylvania State University

Absolutely ^Searchfunder member‌ - it will come down to the DSCR. It isn't abnormal to have one on standby counting towards the equity and another along side - I'm doing a deal now where one is on full, and a second is on a 6 month standby. Hope this is helpful!

1 year ago | like reply | 1 like

professional from Villanova University - Villanova School of Business

Echoing the prior advice. You can have multiple seller notes. Another reason may be if there are multiple seller parties and certain of them are more interested in providing a higher seller note than others, so you may have one seller note with all sellers and another with some or one of the other sellers.

1 year ago | like reply | 1 like

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