SBA financing with Seller Note

by a searcher from The University of Chicago - Booth School of Business

2 years ago

Hi all,

My understanding is that SBA terms don't allow for an earn out, but there are other creative ways to tie future performance to the acquisition.  If I put all of the 'earn out' (which is relatively small in this case) as seller financing is this still possible with SBA?

Thanks

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10 comments

professional from Bishop's University

If you want an earnout, all you do is make a seller note contingent on certain performance targets. The SBA just wants a fixed number for the total purchase at the time of sale. If part of the seller note doesn't get paid because a target wasn't met, that's usually ok.

2 years ago | like reply | 1 like

searcher from Cleveland State University

SBA lenders love seller notes. Talk to a lender like @heather!

2 years ago | like reply | 0 likes

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