How does the SBA follow up on post acquisition?

by a searcher from Emory University - Goizueta Business School

3 years ago

Team, I hope you are all well out there.  As I'm reviewing CIM's and looking to inject myself as CEO of a company, I see many organizations where the seller(s) would like to stay on board.  But the SBA 7(a) loan states that they can't remain for more than 1 year. So how does the SBA check that?  Can the seller do anything past that year?  Or do they have to divorce the organization fully?

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21 comments

searcher

Jason, How are things going? Were you able to buy a company?

1 year ago | like reply | 0 likes

searcher from Wabash College

Yeah, they don't really check on this. Another thing is that default proceedings are really only enforced by the SBA if payment is###-###-#### days past due. Financial reporting is good to keep on top of if you've got a relationship with your lender, but the SBA doesn't want to be notified every time someone doesn't send in their quarterly financials on time. There's a lot longer leash on these given the government involvement.

3 years ago | like reply | 0 likes

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