SBA 7a + Private Credit (Is this or done before possible?)

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May 04, 2026

by a searcher from Harvard University - Harvard Business School in New York, NY, USA

Are these deals possible or been done before? Hypothetical scenario ++ $5mm purchase price -- $4mm debt, $1mm equity ++ Funded with $2mm SBA 7a + $2mm Private Credit ++ SBA 7a is 10-yr amort but Private Credit is 5yr IO and bullet in Year 6 ++ Split as such in order to preserve cash for business growth I know there will be broader implications on equity returns and thus ownership between searcher and investors but just curious if this SBA + Private Credit structure is possible. Fairly new to SBA world so I'm unsure
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Reply by a lender
from Cornell University in Los Angeles, CA, USA
Hi Anon - nice to meet you. This structure won't work with an SBA 7(a). Any other debt in the deal has to be fully subordinate to the SBA, meaning the SBA gets paid first, has first lien on everything, and can shut off payments to the other lender if anything goes sideways. The SBA also won't allow another lender to get repaid on a faster timeline. A balloon payoff at Year 6 while the SBA still has 4 years left is a non-starter. Essentially, if you're using an SBA 7(a), any additional debt has to play by the SBA's rules, and those rules don't leave room for a private credit facility structured the way you've described. We have a lot experience financing various companies via the SBA. If you ever need help reviewing a deal, I am happy to help. We work with all the major SBA lenders. The bank pay us after your loan closes, so this is a 100% free service for you. You can email me directly at redacted or schedule a meeting with me: https://cal.com/francodeguzman/30min. Look forward to chatting!
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