SBA Lien on primary residence?

by a searcher from Pepperdine University - Graziadio School of Business and Management

2 years ago

I am in the middle of a deal and had not heard of this before.....SBA acquisition loan, do lenders require that you just pledge real estate as collateral (along with PG) or do they actually place a lien on your primary residence?

2 likes
351 views
23 comments

searcher from The University of Chicago - Booth School of Business

Good question and responses. Interesting to keep track of the finer details on the SBA collateral and PG implications.

1 year ago | like reply | 0 likes

lender

^Searchfunder member‌ if you do not own real estate (or if you do, but it doesn't have sufficient equity to be pledged as collateral) you will not be required to pledge other collateral under SBA rules. The lender could, however, decide they require other collateral in making their credit decision. For a cash flow lender like Live Oak Bank, we make our credit decision based on the strength of the deal and the incoming CEO, rather than relying on collateral as a backstop. There are many other SBA lenders that are more asset and collateral focused, and I would advise seeking out a cash flow lender for an acquisition transaction.

2 years ago | like reply | 0 likes

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

Examples of self-funded searcher websites

Investor seeking Self-Funded Search Deals

What are market terms for Seller Notes?

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.