SBA deal asset purchase with rollover equity

searcher profile

June 29, 2024

by a searcher from University of Pennsylvania - The Wharton School in Miami, FL, USA

Is there any structure to do a SBA Loan deal with rollover equity in an Asset Purchase? Anyone with experience in it?

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Unfortunately under the new SBA 7A partial business acquisition rules you can either do a partial business acquisition where the seller retains a portion of the stock or membership ownership interest or a full business acquisition where the seller is out completely. Doing an asset purchase where the seller roles cash into the new entity has never really been allowed under the SBA 7A program, at least not in the last 15 years and not with the most recent change.

I have been told there is an accounting method where you can do a stock or membership interest purchase and treat it as an asset purchase from an accounting perspective, but I am not sure how that works. You would need to talk to a tax accountant about that. But unfortunately if you want the seller to stay around and you plan to use an SBA 7A loan, you need to do the deal as a stock or membership interest purchase and not an asset purchase. If you have additional questions or want to discuss financing options you can reach me at redacted Good luck with this one.
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Reply by a lender
from University of Missouri in Denver, CO, USA
I think it would depend on the previous owner's equity change and structure of the deal. SOP pages 111 and 112 go over equity injection requirements. I'd be happy to discuss further. You can contact me here or at redacted if needed.
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