Ever buy Construction company without a contractor's license? (SBA)

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April 28, 2022

by a searcher from California State Polytechnic University - Pomona in San Diego, CA, USA

Has anyone ever had success purchasing a business with SBA financing that required a contractor's license without actually having one?

Did you have a key employee that would act as your RME?

I was thinking about using an RMO Agency....but that requires 20% of the business to be owned by the contractor whose license you're using...there by trigging PG for SBA.

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Reply by a searcher
from Stanford University in San Clemente, CA, USA
I bought a plumbing business with a SBA loan without a plumbing license. The seller was the RMO until I was able to get my license. We had an employee who could have also served as the RME as a plan-B. The bank really needed to believe that our Plan-B was viable to get comfortable with the deal. We had a seller note that was forgivable in the event the seller didn't cooperate on being the RMO.
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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
You can do it if you have a seller that is staying on or you have an employee that can act as the license holder. However, not all SBA lenders will go this route. SBA lenders are going to be very concerned about relatable experience and what is going to happen if that key employee walks. One way around it is to give that key employee some equity in the transaction. Even a small amount (5% or less) can go a long way to making a lender more comfortable. I am more than happy to discuss strategies and what we have done in the past at redacted
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