Can you combine an SBA along with a seller note on a private deal?

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October 26, 2021

by a searcher from DePaul University in Oklahoma City, OK, USA

Was wondering if anyone utilized both an SBA and a reverse seller note on a transaction? Will banks allow a combination like this on a deal in the range of $2M to $5M EBITDA? Thanks in advance for any insight.


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Reply by a searcher
from Syracuse University in Hamburg, NY 14075, USA
SBA loan size is maxed out at $5MM and $5.5MM for 7(a) and 504 respectively, and will allow a seller note assuming that the terms of the seller note are not preferential or more favorable than the SBA note. Keep in mind that the SBA does not allow earn-out language in the seller note.
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Reply by a searcher
in New York, NY, USA
Good question. To broaden this, are there any SBA loan restrictions in general? I imagine it's one part of the Cap structure similar to other debt... implying it can be used in combination with seller financing, investor capital, etc.
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