Looking for a SBA 7(a) loan with low net worth

March 13, 2024

by a searcher from Miami University of Ohio in Cleveland, OH, USA

I recently went for pre approval on a loan above a SBA loan as a broker encouraged me to do so. This led me to find out from this lender that with a low net worth, I would have trouble securing a loan above $1M, even through the SBA program. I have a high credit score and have enough capitol from investors to go for the full $5M loan from the SBA. Does anyone have experience how I can get over the hurdle of a low net worth?

Thanks

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Reply by a searcher
from Northwestern University in Washington, DC, USA

Hi Jim - It's been awhile, hope you are doing well. We have the shared experience of IOI->LOI->APA. And for all the reasons Mike Nall and others have mentioned I think this remains a good construct even for smaller deals. One thought is to position to the broker that you are open to incorporating their key considerations-terms into the LOI. The idea is to confirm your next step is an LOI, but to get them to identify what are the key points they are trying to nail down. You can then decide if those points are workable for you while retaining the protections of using an LOI.

Reply by a searcher
from Keller Graduate School of Management of DeVry University in San Francisco, CA, USA

As a trade contractor in my previous life, at one instance I called over 100 commercial lenders looking for financing. Back then I uploaded Financials and Bank Statements to an FTP site so lenders could download them. 7 said yes, 3 sent over checkbooks. someone will always say yes. Plus they would tell me stories about the big players looking for commercial paper. Many on the edge of or in bankruptcy

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