SBA lender for HVAC acquisition

investor profile

July 23, 2023

by an investor from University of California, Berkeley - Haas School of Business in San Francisco Bay Area, CA, USA

A friend of mine has an HVAC company under LOI and is looking for an SBA lender. I would appreciate referrals to direct lenders (no brokers) who may be able to work with the following profile:


- Company is 20+ year old HVAC business in Califonia. Approximately 80% residential, 20% commercial. Mostly repair/replacement with minimal new construction.
- 800k SDE. Consistent over the past few years. The deal will easily meet underwriting cash flow metrics.
- $1,900,000 loan amount inclusive of working capital. Most of it will be goodwill, so lender needs to be comfortable lending on cash flow
- 5% cash equity, 5% full-standby seller note, 90% loan
- Rate should be competitive in the Prime + ###-###-#### % range
- Must be able to move quickly. Most pieces are in place (insurance, licensing, etc.) and we are looking to close within 60 days.

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Reply by a lender
from University of Wisconsin in Madison, WI, USA
Hi Thomas, I've done some deals before at 90% LTV, but typically the lenders that will go to this high of a leverage point are going to be over the interest rate band that you've specified. I did such a deal last September for an HVAC acquisition. Normally (Lisa / Keith - correct me if I'm wrong), at this high of an LTV point unless you have rock solid DSCR, you're going to be over Prime + 2% due to the additional risk to the senior lender with this much leverage extended.

I have a couple of deals currently at 90% LTV and they're closer or at the Prime + 2.75% mark. Glad to connect to discuss further if you want. My email is redacted Below is the deal that I referenced above that closed last fall: https://www.pioneercapitaladvisory.com/closed-deals2ca9/1
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Reply by a lender
from Pennsylvania State University in Tampa, FL, USA
^redacted‌ if you are still exploring options here I'm a direct national preferred lender focused on change of ownership transactions###-###-#### redacted
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