SBA seller retained equity question

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April 09, 2026

by a searcher from Harvard University in Toronto, ON, Canada

Calling in SBA pros here! Seller rolled 19% equity with 2 years PG. Is he allowed to hold the shares under his holdco than his personal name? Will that impact any SBA covenants? Sunny
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Reply by an intermediary
from The University of Chicago in Chicago, IL, USA
I am not an SBA lender. Imo, or at least my interpretation is that SBA does not allow "equity rollover", however, SBA does allow seller "retaining" equity of the entity that the buyer is buying. I have done many rollover deals (all non-SBA), and they are different than the retained equity deals. You are tops in finance/accounting. x% of unlevered equity value is not the same as x% of levered equity value.
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Reply by a professional
from University of Toronto in Toronto, ON, Canada
^redacted‌, the professional you need to consult is ^redacted‌. He's the recognized expert.
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