I have seen a few posts about SBA 7a with real estate where we could structure it as a 25 year loan. I'm looking at some deals with real estate, in which case the 10% down becomes a bigger amount due to the real estate being included. A solution is to have the seller note with PIK (interest paid in kind) on standby for the duration of the loan.

This becomes a negotiating point for conventional 10 year loans but it becomes too drastic on a 25 year loan where the seller note is on standby for entire tenure to qualify that seller note as part of the 10% down.

Has anyone been through or looked at a deal with such a structure with a seller note as standby to offset the equity injection requirements?

Any suggestions for how we can negotiate this for the seller to agree to this?