SBA won't accept Add Backs

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by a searcher from Princeton University
in Livingston, NJ 07039, USA

10mos ago

SBA won't accept Add Backs

I continue to see deals with family salary add backs, cash income, personal expense add backs, etc. These deals will never get financed by an SBA bank. Here are some ideas I have had and I would love the community's thoughts. 1) Seller Financing 2) Get the SBA to fund only the portion they will accept (not sure if this is possible) 3) Equity partner What have you done to overcome this issue?

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reply by a searcher 10mos ago
from Virginia Polytechnic Institute and State University (Virginia Tech) in Blacksburg, VA, USA

The SBA has little to do with the process, and they certainly aren’t reviewing your add-backs. A bank’s underwriter may not buy it, but I’ve never seen an add-back rejected that I considered reasonable.

reply by a lender 10mos ago
in Falmouth, MA, USA

I am curious to learn more about the add backs. Unreported cash revenue is a non-starter and poses a tax liability risk. However, we work with banks that are open to understanding legitimate add backs, and we have closed many deals using the types of add backs you mentioned. Feel free to email me at redacted