Does anyone have experience using SBA loans for Canadian businesses?

searcher profile

August 01, 2023

by a searcher from INSEAD in New York, NY, USA

I'm interested in buying a Canadian business that operates completely remotely. The owner has told me that we could incorporate the business in the US, have the Canadian company under the US company, and then be able to use the SBA.

Is this true and anything I should look out for?

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commentor profile
Reply by a professional
from University of Miami in New York, NY, USA
Nicholas - i’m sure the policy varies from lender to lender, but as long as the borrower is a US company, a loan should be OK. I found one resource that specifically said, “… the borrower would be the American firm and of course the Canadian entity would guaranty as would the owners of the Canadian firm. Yet SBA has specific requirements for foreign-owned businesses and for businesses owned by non-citizens and non-legal permanent residents.”

it’s worth a quick research project, and then developing an acquisition plan to conform to the requirements of a specific lender. Meaning, after the research, we would have to identify a lender who is willing to do it. I’ve got a few on my contact list who may be able to assist.

Let me know! I’d appreciate the opportunity to discuss.

Vish

Vishal S. Petigara, Esq.
Petigara Law Group, redacted ###-###-####
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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Unfortunately you cannot use an SBA loan for a Canadian business. If you are a Canadian citizen then the SBA loan program does not apply to you. If you are a US Citizen and buying a Canadian business, the SBA will not fund the acquisition of businesses outside of the United States. I hope this helps to clarify. Sorry.
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