SBA 7a - Seller Financing Replacing Downpayment

searcher profile

May 08, 2024

by a searcher from IESE Business School in Philadelphia, PA, USA

Question for the SBA experts. I am looking at a deal $1,5M purchase price, $500k SDE approx. Seller willing to take on financing. Could I use seller financing as a substitute for cash down?

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commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
The updated SBA SOP technically allows you to use seller financing in lieu of a down payment so long as there is a seller note for 10% of the purchase price that is on full standby for 2 years. You can always have multiple seller notes, one on full standby and another one that is in repayment. However, few lenders are doing deals with no equity down. Most are still wanting at least 5% down, although there are some circumstances where we have been able to get deals done with $0 down with a seller note on standby for 2-years. I would be more than happy to discuss using SBA lending and seller notes in more detail as there are some additional caveats. You can reach me here or directly at redacted
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