Refinancing with SBA Loan?

searcher profile

December 04, 2022

by a searcher from University of Nevada - Reno in Seattle, WA, USA

Hello,

Does anyone have experience of refinancing with an SBA loan? Only issue I believe may exist is that I have key employees with have ownership in the business. I know if you try and buy a business with the SBA, the principles have to leave in 12 months. Does it work the same way with refinancing?

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commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
It really depends on what your situation is. If you used seller financing to buy the business you cannot refinance the business with an SBA loan for two years after acquisition. However, if the two years have passed you can refinance the debt on the business using the SBA. If you have an existing SBA loan, it is very challenging to refinance an existing SBA loan into a new SBA loan. We can discuss options on a call if you like. .

The SBA rule regarding sellers not being able to stay on only applies to purchases. If it is a business you already own and you have some other minor owners or past sellers that are still involved but you originally financed the purchase differenlty, you can refinance it with an SBA loan. There is no technical limit to the numbers of owners there are for SBA financing. However, anyone that owns 20% or more of the business would be required to sign a personal guarantee and would be subject to any other collateral requirements of the SBA loan program if the transaction is not fully secured by business assets per the SBA Standard Operating Procedure ("SOP").

I would be more than happy to jump on a call to discuss options with you at any time. Using an SBA loan to refinance business debt is a great way to recapitalize the business and push out debt service requirements. I can be reached directly at redacted of you can contact me here. Thank you. .
commentor profile
Reply by a searcher
from IMD in Amsterdam, Netherlands
Hi Thomas, we can help you get rid of the SBA during the acquisition and free up a fair bit of working capital in the process. feel free to drop me a line redacted
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