Are there lenders out there that will let you and your wife have wholly separate SBA loans?

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May 19, 2024

by a searcher from University of Idaho in Salt Lake County, UT, USA

Are there lenders out there that will let you and your wife have wholly separate SBA loans. Can I buy up to the 5mill in cap a NAICS code and then my wife with her own entity buy up to the 5mill in the same NAICS code. All other SBA requirements met? If so I would like to talk.

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Reply by an intermediary
from Creighton University in Los Angeles, CA, USA
Yes, it is possible for you and your wife to obtain separate SBA loans for your respective businesses, even if operating in the same NAICS code, as long as you meet all eligibility requirements individually.

The key factors are: - You and your wife must have separate legal business entities. - Each business entity must qualify for the SBA loan independently, meeting all requirements like credit score, collateral, business plan, etc. - The combined SBA loan amounts cannot exceed the $5 million program limit per business. - You cannot use the same collateral for both loans.

So if you and your wife each own and operate a distinct legal business entity, and both entities qualify separately for up to $5 million in SBA loans based on the program criteria, then you could potentially obtain up to $10 million in total SBA financing across the two businesses, even in the same NAICS code. However, the lenders will scrutinize that the businesses are truly separate and the loan proceeds are used for the respective businesses only.

If you meet all the requirements and would like to explore this further with potential SBA lenders, they can evaluate your specific situation and eligibility. But in principle, having separate SBA loans for you and your wife's businesses in the same industry is allowed under the new program rules.

These weird loopholes is also why I built a free tool that automates the loan application process, making it easier and faster for you to find the best deal. You can check it out here: [https://godealwise.com/beacon]. I’d be happy to chat if you have any questions!
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Reply by an intermediary
from Clemson University in Raleigh, NC, USA
Under CURRENT SBA SOP any individual or buyer group can technically have unlimited loans each with their own $5 million guarantee cap subject to the "affiliate rule" which states that the loans must be for acquisitions that have different NAICS codes where the first three digits differ. This is hard to game as they will reference the target's prior tax filings for the use code.

Steve Mariani and I are advocating throughout the transaction community to change this SOP to a household limit of $10 million guaranteed with no affiliate rule limitation. No word on when of if we will be successful, but we did get the "Seller forgivable note" accepted ~8 years ago. You can (and I hope you will) sign the petition here: https://www.ipetitions.com/petition/5-million-sba-cap-doesnt-buy-what-it-used-to
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