Likelihood of a combination of seller's financing and SBA 7a lending

by a searcher from University of Arkansas at Fayetteville

4 years ago

I have negotiated a seller to 20% seller financing. I intend to get the other 80% from SBA 7a financing, but it is a requirement of an LBO that  the bank get paid first. My SBA lender is telling me that very few sellers will do that. In your experience, is this a sticking point? Is there a way around this or a way I could sweeten the pot?

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19 comments

lender from University of Utah

Happy to discuss from a bank perspective. --@----.com or###-###-####

10 months ago | like reply | 0 likes

lender from University of Missouri - Columbia

100% leverage (even if allowed) would be pretty tough to cash flow unless you bought at a low multiple. 5% cash/5% fully subordinated seller note is possible. That is still high leverage though so make sure cash flow supports that level of debt.

4 years ago | like reply | 0 likes

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