Refinancing My Seller Note

by a searcher

8 months ago

Hi everyone!

I closed a self-funded acquisition in 2023 with a 20% capital injection and 80% seller financing. Deal was $5.3m. $1m down. $4.3m seller note. The loan term was 3.5 years, which was intentionally designed to be refinanced before then. Current rate is 9% fixed.  Amortized over 10 years. 

I would love to refinance out of this deal if/when interest rates start coming down. My understanding is that if I were to refinance through an SBA loan, I would need to demonstrate 2 years of making on-time payments to service my current loan. 

Are there any other refinance options? Are there any options to refinance before 2 years? I am very familiar with SBA loans, but not other options.  

Thank you!

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4 comments

investor from University of Missouri - Columbia

Your loan terms seem very favorable, especially in today's environment. Is there a particular reason you are wanting to refinance to a higher rate (if SBA) and also add a PG? To me, that would seem like you are moving backwards. From my limited understanding, I would stay put.

8 months ago | like reply | 2 likes

lender from Northwestern University - Kellogg School of Management

We might be able to help you out. It is on the small side of things for our SBIC fund, but could look to do it out of one of our state specific investment funds. Email me at --@----.com if you are interested in learning more.

8 months ago | like reply | 1 like

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