View on SBA 7a rates as rates rise ? How high is too high ?

by a searcher from Columbia University - Columbia Business School

1 year ago

Internally our view at Obsidian these days is that to be conservative - we are modeling out SBA Loans for potential acquisitions in the 9.5%-10% range. To put this in context pricing on our 2020 acquisition financing was in the high 6s. Any thoughts from the community as to whether we are in the right ball park or if we are being way too pessimistic re the cost of 7a Capital?

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searcher from Emory University - Goizueta Business School

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1 year ago | like reply | 0 likes

searcher from Harvard University - Harvard Business School

As an additional note, some analysts are predicting a lower Fed rate middle of next year, which might act as some relief. Seems like there is now the additional negotiating point of using the seller note as an even bigger piece of the capital structure and enticing them with a higher interest rate (albeit lower than SBA)

1 year ago | like reply | 0 likes

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