Seeking perspective/experiences with SBA General Program (GP) approval

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by a searcher from Harvard University - Harvard Business School
in Colorado Springs, CO, USA

1yr ago

Seeking perspective/experiences with SBA General Program (GP) approval

We are under LOI for a partial buyout of a healthcare company, but due to license requirements will be doing this through a Managed Service Organization (MSO) structure.

The current SBA rules only allow for a seller to retain ownership in a stock transaction. Given the license requirements and the way the MSO structure works, our transaction needs to be an asset purchase. My understanding is this will require GP approval from the SBA which injects a lot of uncertainty into the deal.

Has anyone had recent experience with this? I would greatly appreciate any and all perspective - if approved, how long did it take? If denied, why? I am trying to gauge the risk of spending diligence and legal fees and ultimately have the application denied.

Thanks in advance,
Justin

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reply by an intermediary 1yr ago
from The University of Chicago in Chicago, IL, USA

Justin: Good to see another LOI after the Telecomm earlier. I have discussed this matter partial ownership change (that is what they call it in the SOP) extensively with the SBA. I am also familiar with the need for MSO. Let's talk. Or, if you want, I can call you,

reply by a lender 1yr ago
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

I concur with Zachary and Sean. The GP process is not as bad as it once was. They have done a lot to streamline it and make it easier. However, with that said, it does add time so our preference is always to avoid it at all costs. Plus, once denied there, it pretty much makes your deal a dead deal no matter where else you go.