I'm looking at a business that has fleet of vehicles and containers that have current market value worth almost 70% of the purchase price of the business. The nature of the business is very low risk in general, with most of the revenue recurring and stable for the past few years.
Would SBA lenders be willing to entertain longer term than the typical 10 year for a business like this, given the value of the physical assets that come with the business? 15 years perhaps? Given the low risk profile of the business, it's priced at premium so having longer amortization term will definitely help with cashflow and DSCR.
Any lenders here that can provide perspective?
Thank you
SBA loans - longer term amortization without real estate?
by an investor from Columbia University - Columbia Business School
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Other thing to keep in mind though is that if the equipment is vehicles, it is unlikely you are going to get beyond 10 years. If it is yellow equipment (tractors, cranes, etc.) then often this equipment has a useful life that exceeds 10 years, but most over the road vehicles do not. Also, the lender is going to likely require an equipment appraisal and look at the remaining useful life of the equipment as they are going to have to justify to the SBA going with the longer amortization. If the useful life in that appraisal does not exceed 10 years then you are unlikely to get the longer amortization done.
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