SBA & Independent Sponsor Deal at the same time?

September 25, 2025

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

Curious - have there been folks who've done both at the same time? I set out to do IS deals ($3mm+ EBITDA) but coming across interesting smaller opportunities better suited for SBA ($750k - $1.5mm EBITDA). Thinking of doing a smaller deal with SBA to start to extend runway and get more cash coming in while searching for larger deals. Thoughts on this? How would the SBA lenders view this? What about capital partners for IS deals down the road?

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Reply by a lender
in Falmouth, MA, USA

We focus on SBA and smaller private credit deals that require less than $25 million in funding. Success in these markets requires strong management and financial backing, but they are two different models. SBA loans offer maximum flexibility regarding covenants, common equity distributions, and loan terms. As long as payments are current, you maintain significant operational freedom. In fact, many deals within the SBA's funding range won't even qualify for conventional lending. It's often surprising that the loudest critics of SBA loans have no experience with them. It's important to keep an open mind and understand the risks involved. If you'd like to speak with someone who has over $400 million in deal experience, contact me at redacted

Reply by a searcher
from Harvard University in MG9V+6H2, Guatemala City, Guatemala

Technically you should be able to do it. In practice, companies that are a good fit for SBA tend to be small, small typically means high involvement required in the operatiosn as these small business tend to have a lot of key man risk. As such, running these purely as an IS and assuming these small SBAable companies are passive investments can result in disaster.

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