I've heard that the SBA 7a loans allow for the owner to retain some equity post-close, by structuring it like a partner buy-out under the new rules. Does anyone have any experience with that?
If, for example, I were to use a $5M SBA 7a loan to buy 81% of the equity in a target...
-- Would the dscr analysis be done on the full EBITDA during underwriting, or just my 81% share?
Similarly, if I were to use a $5M SBA 7a loan to buy 79% of the equity in a target...
-- Would the prior owner have to provide a PG on the loan?
Are there any other considerations, from either a personal risk or a lender underwriting perspective that I should be thinking about?
Any info on equity rollover with SBA 7a?
by a searcher from Northwestern University - Kellogg School of Management
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