SBA loan for "part" of a business

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by a professional
in Salt Lake City, UT, USA

2yrs ago

SBA loan for "part" of a business

Does anyone have any experience with purchasing a portion of a company and how to get SBA financing for it? The deal I am looking at is 2M purchase price for the "maintenance" portion of a landscaping company (mowing and cleanups). There is also a "hardscape and excavation" portion of the business that is not being sold, and is actually bringing the numbers down significantly. I am worried that the underwriter will see that the tax returns do not align with the P&L and get scared off. My thoughts were to "adjust" the tax returns to account for only the maintenance portion, but what does this look like in practice?

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reply by a lender 2yrs ago
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

Great question. You can purchase a portion of a business versus the whole business, but you would likely need accountant prepared financial statements that break the two divisions down. The Bank would still need to see the tax returns, but they would rely on the financial statements for the portion / division you are purchasing for underwriting purposes. Outside of having something broken down from a third party, it is going to be very hard to get the lender to trust the numbers. Please let me know if you would like to discuss further at redacted or here. Thank you and good luck.