Tell me your SBA story

searcher profile

January 12, 2024

by a searcher from New York University - Leonard N. Stern School of Business in New York, NY, USA

I know not everyone is able to secure a SBA 7(a) loan. I want to connect with someone who was not able to get SBA financing and share what went wrong. I would like to avoid any early mistakes in the process.

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commentor profile
Reply by a lender
in United States
In my extensive experience with various SBA lenders ^redacted‌, including big banks, community banks, and non-bank lenders, I've learned a crucial lesson: transparency is key. All too often, deals falter at the last minute due to a lack of openness from everyone involved - sellers, brokers, buyers, and yes, even direct SBA lenders.

Some folks hope to hide issues, praying they won't surface, while others unintentionally omit critical information. That's why I focus on thorough vetting right from the start. I ensure potential buyers and sellers are fully qualified for government-guaranteed lending before they even begin their business search/buyer search.

This approach saves precious time and money. In this entrepreneurship through acquisition with SBA world, expect curve balls. But with a strong team by your side, you're ready to hit them out of the park, steering your deal smoothly to successful funding. Occasionally, an unforeseen challenge might arise, potentially derailing a deal. But being prepared means you're always ready to adapt and move forward. Every deal has a story. I look forward to see what our friends in this thread will have to say!
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Reply by an investor
from Western Washington University in Key West, FL 33040, USA
Reading your post, it occurred to me that I don't think I've ever heard of someone not being able to get an SBA loan. Sure, the bank might require a little more equity to get the DSCR where they want it, but I've never heard of anyone being straight up denied. Assuming your credit score is better than 640, you don't have a prior default within the past 7 years, the business isn't horrible, and the purchase price is within reason, I think you will find a deal structure and bank that has an appetite for you and your deal.
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