SBA 7a lender term sheets

searcher profile

February 19, 2024

by a searcher from King's College London, University of London in Dallas, TX, USA

Happy Monday! What rates and down payment requirement are you seeing on term sheets?
Looking for some comps for a $4M-5M acquisition and any lender you would recommend for low rates on the SBA 7a.

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commentor profile
Reply by a lender
in United States
^redacted‌ - I've learned to be skeptical of SBA loan term sheets from direct lenders attached to business listings. From my time previously working directly for many years with various SBA lenders, I saw too many inexperienced SBA lenders hand out term sheets as if they were giving away free candy during a parade.



These newcomers often based their term sheets on the broker listing summary or broker recast of financials without diving into the crucial IRS-filed tax returns—the real basis for any bank's approval.



Shopping for a change of business ownership loan project based on these superficial term sheets is like gambling on a random spin of the wheel, hoping for favorable numbers without any solid foundation.



True, term sheets often serve as mere enticements, lacking in real substance. To truly understand what's on the table, one must demand and work with the hard facts, far beyond what any initial term sheet might suggest.



Not all SBA lenders are created equal for many reasons. There are trusted ones who take their craft seriously with pride. As a business acquisition loan consultant, I wouldn't ask these partners of mine for any early terms or interest rate until we have sufficient factual data on both the buyer and the subject business that the underwriters will review and opine.
commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Steve, we are a commercial loan brokerage shop with over 500 funding partners and over 60 SBA funding partners. We would be happy to look at your specific deal and provide you more concise pricing. I am always hesitant to provide pricing without seeing more details on a transaction because pricing can vary quite a bit based on how much collateral there is, what the total loan amount is, guarantor strength, equity down, experience, industry, lender, etc. But in general most of the deal we are seeing get done are in the Prime plus 1.50% to 2.50% range, so with Prime at 8.50% today, that is in the 10% to 11% range.

As for money down, that usually changes depending on the deal and level of experience, cash flow, etc. But in general most of the deals we do get done with 10% or less money down.

If you have additional questions you can reach me here or directly at redacted Good luck.
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