Real Estate Collateral for SBA LOANS in addition to 10% downpayment

by a searcher from New York University - Leonard N. Stern School of Business

1 year ago

I just got off the phone with the broker. I was told that SBA lenders require not only a 10% downpayment for the deal but also real estate collateral, especially in this environment. I am quite surprised to hear this, wondering if the broker just made an excuse to say no. Has anyone heard anything similar recently?

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lender from Trinity College Connecticut

Alex, My apologies, as my response above was meant to be to another post that asked a different question. That said, Chris McIntosh's answer above is correct that you were provided incorrect information. The broker chose to provide this answer because he either does not want a buyer to use an SBA loan or he just doesn't know the SBA regs very well.

1 year ago | like reply | 1 like

lender from Trinity College Connecticut

I've never had to discuss NAICS codes with my SBA lenders to be able to qualify deals for 0% down for add-on acquisitions. The rule is that if you are an existing business and doing an add-on acquisition "in the same industry" then you should be able to qualify. I would expect that if you operate a bricks and mortar baked goods store that is purchasing an online baked goods business that you would qualify under the 0% down provision. Feel free to contact me at###-###-#### or --@----.com and once I know the details I can validate this with the 10+ SBA lenders I work with.

1 year ago | like reply | 0 likes

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