SBA eligible under new rules? Scenarios.

Scenario #2! Partial change of ownership will need to be a stock purchase.

The SOP currently reads "“The small business is redeeming a partial ownership interest from one or more owners. All remaining owners are subject to the requirements for guaranties in Section A, Ch. 5, Para. A; however, the percentages of ownership for this requirement will be based on the post-sale percentage of ownership in the business."

BUT a technical update given over industry association calls says the following "“Will delete provision that allowed personal guaranties to be based on post-sale ownership percentages and to clarify that existing guaranty requirements apply [this means that full personal guaranties will be required from any owners that held 20% or more ownership 6 months prior to the sales transaction]“

Until the SOP is updated we can rely on it for guidance on how to interpret post close gty requirements. ^Searchfunder member‌ and I have office hours each Wednesday. We discuss in detail the changes to the SOP, structure and eligibility. Reach out if interested! --@----.com

You cannot do a seller roll over via an asset purchase via the new SBA rules. If you are doing an asset purchase it has to be a full buyout. If you are buying the stock the seller can retain existing ownership. Although there is still some confusion on the new rules, I have been told the SBA is approving the deals if the seller now owns less than 20% without the seller needing to guarantee the loan. I hope this helps. If you have additional questions you can reach me here or directly at --@----.com