Combining SBIC and SBA (b/t Independent Sponsor and Search Fund)

searcher profile

April 28, 2025

by a searcher from Columbia University - Columbia Business School in Jacksonville, FL, USA

I am a little tired of always going to the SBA. I have had SBA loans before, but I'm on the wrong side of 50 to personally guarantee everything under the sun. While I would do it again, I'm looking at $1-$3M in EBITDA and wondering if I can do a partial SBA and partial SBIC loan, so I can limit my exposure while getting some of the lower-priced debt that SBA offers. Has anyone ever done this?
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Reply by a searcher
from Bentley University in Exeter, NH 03833, USA
SBIC also has to be "out" at a certain point/time horizon, and tends to take a position that is a combination of debt (protection and preferred return) and warrants/options (for the upside). Depending on the type of company and deal size an SBIC is unlikely to be interested. ... now if you or a friend happened to run the SBIC, so you got to direct/invest the capital, then you could be on to something...
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Reply by a professional
from University of Utah in Salt Lake City, UT, USA
Hey...you can't do partial SBA. You either own 20%+ and PG the loan or own less than 20% and don't need to (assuming someone else is). SBIC actually sounds like a better option in your case. The EBITDA you're looking at will likely be on the small end of SBIC but if you went slightly larger there are quite a few SBIC options where you wouldn't have a PG. Happy to answer any questions
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