Debt stack for a future deal

January 26, 2025

by a searcher in Chicago, IL, USA

I'm working on getting pre-qualified for loans before I find the right deal. For the size of business I'm looking for, I anticipate a larger loan than just SBA being required. The local bank I'm working with said based on my info that qualifying for the full $5M SBA is likely (still waiting on the term sheet), but stacking a conventional loan on top of that may be challenging (apparently they've been burned in the past and are somewhat gun shy).

My question: While I understand that the final decision will ultimately be based on the business I find, is it wise (or a waste of effort) to shop around at this stage for a bank that could offer SBA + other type of loan? The alternative would also be to have a business in-hand, just want to do as much as I can before I get to that stage. Thanks!

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

I would love to connect and see if we can provide any assistance. We are a Commercial Loan Brokerage shop with over 500 funding sources. We do SBA as well as conventional and non-bank lending. We also do pre-approvals and when we issue those for a client or on a transaction we do so. knowing we would have multiple lenders that would fund that deal.

If you are looking for the lender that does the SBA loan to provide you a conventional loan as well referred to as a Pari Passu loan, please note Pari Passu loans are hard to get. Less than 10% of SBA lenders will even consider Pari Passu loans and those that to have significantly higher underwriting requirements, The larger the Pari Passu loan you are looking for the less lenders that are available. We have done Pari Passu lending but cannot over the same guarantees of success as we can with conventional lending. We are always happy to look at a deal pre-LOI and provide feedback on how likely it is to secure the requested financing and help you come up with strategies to get the deal done.

Please let me know if you would like to discuss further here or directly at redacted

Reply by a lender
in Falmouth, MA, USA

^redacted‌ Prequalification doesn’t really mean much when it comes to acquisitions. I’ve seen business brokers talk about getting businesses “pre-qualified” for SBA transactions, but at the end of the day, it doesn’t hold much weight. The lender is ultimately betting on you as the buyer and the quality of the business’s earnings.
When I work with clients, I usually start by having a conversation to understand their goals, deal appetite, qualification and financial backing. From there, we explore different options and structures together. If you’d like to chat more about this, feel free to reach out at redacted We work with some of the best SBA lenders out there, but also collaborate with private credit for the larger transactions.

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