Refinance Acquisition Bridge Loan with SBA Loan

November 12, 2024

by an investor from University of Pennsylvania - The Wharton School in New York, NY, USA

Does anyone have any insight or experience shares on refinancing a bridge loan with a SBA loan. This would be a true third-party loan and not a seller note. Am interested in this approach as it would speed up the closing of a pending acquisition while at the same time providing a route to the lowest possible cost financing. This approach appears to be possible if you can demonstrate a 10% improvement in debt payments, however, I'm concerned I might run into other roadblocks like a minimum ownership period before the loan can be refinanced.

Am aware that the rules have changed on this somewhat recently per the below.

https://cdn.ymaws.com/www.naggl.org/resource/resmgr/sops/SOP_50_10_7_effective_08.01..pdf
https://starfieldsmith.com/2023/07/best-practices-debt-refinance-requirements-under-sop###-###-#### /

Am also aware of the many general SBA restrictions having had a SBA loan on previous acquisition that was exited (located in the U.S., eligible business, personal guaranty, etc.).

Thanks in advance!

Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

I would be happy to connect and talk through it. There is no rule on how quickly you can refinance with an SBA loan. However, the risk is you will get stuck in no-man's-land from an operating standpoint. If you close and wait too long, lenders might want to see how more performance shakes out. In that case you might have to wait a longer time. If you have a lender lined up at the beginning that plans to do the take-out right away, then it can be done right away. Happy to have a conversation and explore options. You can reach me here or directly at redacted

Reply by a lender
in Ponte Vedra Beach, FL 32082, USA

^redacted‌ I refinance a lot of bridge loans post acquisition for various purposes with SBA> The 10% improvement ruling has changed and given the nature of a bridge loan it can nearly always qualify for SBA refinance. If the refi is within 12 months it can also still be looked at as an acquisitions in some circumstances versus a refi. My cell is###-###-#### and my email is redacted happy to discuss anytime in more detail to see if we can help.

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