Private Lenders vs SBA Loans : Going All In

searcher profile

November 22, 2023

by a searcher from Columbia University in West Palm Beach, FL, USA

I found a business and I'm ready to go all in. I need to secure financing. I've spoken with various local and national SBA lenders. Currently, getting rates between 10.25% to 11.50% over a ten year term. Recently, I started cold calling pe shops and inquiring about loans. Some laughed at me, some laughed at me and hung up, some scheduled calls for next week.

Any guidance on private lenders who are interested in holding a primary lien position to a self funded searcher.

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commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Unfortunately we are seeing most SBA deals getting priced in the Prime + 1.50% to 2.50% range, which is between 10% and 11% today. Although we have both conventional bank partners and non-bank lending partners that will lend on business acquisitions, they are going to require more capital down and provide shorter amortizations on average, so in many cases it is not as attractive as the SBA financing. However, I am more than happy to have a discussion to go over all options available. You can reach me here or directly at redacted
commentor profile
Reply by a lender
from California State University, Sacramento in Seattle, WA, USA
Rate in not always the most important thing. Make sure the structure is adequate and well considered. Work with a lender lender that considers working capital and other qualitative aspects of the analysis. For cashflow lending, the quotes you're getting appear market-rate for SBA.
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