Refinancing out a seller with a SBA Loan

searcher profile

September 03, 2020

by a searcher from Harvard University - Harvard Business School in Los Angeles, CA, USA

Has anyone ever refinanced out a seller note with SBA financing? Does the SBA view refinancings differently than acquisitions? The current environment is proving tough to get a SBA loan done so we're considering having the seller hold a 100% note and re-engaging with banks###-###-#### months from now. Would welcome all thoughts on this - thanks!

4
10
205
Replies
10
commentor profile
Reply by a lender
from University of Missouri in St. Louis, MO, USA
Once you make 24 months of payments then you are eligible to refinance the seller note with an SBA loan. WE actually do this a lot. You might structure your seller note with a balloon at 36 months so that there is a defined reason to refinance. If it is just a straight line 10 year seller note there could be pushback on why the SBA refinance is needed. email me if you would like some pointers on this redacted
commentor profile
Reply by a lender
from Nova Southeastern University in Fort Lauderdale, FL, USA
Just to be a little bit more clear, 24 months of actual payments!. If the loan were on Standby and no payments made, you would then need to wait of course until you can show 24 months of on time payments!
commentor profile
+8 more replies.
Join the discussion