Two partners and SBA limitation

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by a searcher from University of Pennsylvania - The Wharton School
in San Francisco, CA, USA

2yrs ago

Two partners and SBA limitation

How can one maximize the SBA loan with two partners and take out the full amount of up to $10mm by overcoming the exposure limitation of $5mm per business? Does anyone have any experience with this? Thank you in advance.

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reply by an intermediary 2yrs ago
from Clemson University in Raleigh, NC, USA

That is not possible as ^redacted‌ pointed out. Meaning two people can't collaborate on a $10,000,000 deal. However, one person could buy 5 businesses (as long as they are deemed complimentary) for $1,000,000 of SBA guarantee each. Fun fact, that same person could later buy another business with principal paid down from the $5,000,000 from the prior transactions.

reply by a lender 2yrs ago
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

Agree with the above. The only way two partners could maximize their exposure using SBA would be for one partner to own 81% or more of one business and acquire that using SBA financing while the other partner owns under 20%, and then switch it for the next business. The SBA exposure only counts against the guarantor, so in this way you could partner on two separate deals and get up to $10 million, but one would control one deal and the other the second deal. If you would like to discuss you can reach me at redacted Good luck.