SBA Lenders $10M - correction
March 20, 2025
by a searcher from University of Pennsylvania - The Wharton School in Miami, FL, USA
Hello SBA Lenders and Debt Brokers
I've seen some posts claiming there are SBA lenders that go up to $10M in funding.
Possible for any lenders or debt brokers to confirm if true? If true, can you please announce yourself to the community?
The limit is $5M from SBA + $2.5/3M additional for companion from certain banks. A total of up to $8M of debt but only $5M SBA.
Folks should be careful what they post in this regard as there are many SBA - kings like Bruce and Lisa who know the rules inside out.
Thank you!
Jason
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Now, you can do an SBA 7A loan with a Pari Passu loan, and the largest I have seen done has been a $10 million transaction where $5 million was SBA 7A and $5 million was conventional bank debt. But that amount is rare, and typically the highest we see is $8 million combined between Bank and Pari Passu debt. But the Bank SBA portion does not exceed $5 million in this situation.
If you use the SBA 504 product, since the SBA 504 only funds a maximum of 40% of the property acquisition price and a Bank funds the other 50%, technically you can do projects with a total cost up to $12.5 million and still stay under the SBA limit. However, the SBA 504 portion of the loan would only be $5 million under this scenario as they are only funding 40% of the loan amount. Three things to note here. You can only use SBA 504 funding for real estate purchases or equipment purchases (non-vehicular). Secondly, if you do an SBA 504 to acquire real estate when there is a change of ownership on the business at the same time, the maximum you can finance on the SBA 504 loan is 35% of the purchase price and you need to bring 15% in equity into the transaction. Based on the SBA portion being 35% of the project cost, you could technically do a total property acquisition as high as about $14.8 million. Lastly, you can always have the SBA 504 portion of a project be less than the 35% to 40% so long as the senior lender is willing to fund a higher percentage of the project cost. So in theory if the Bank is willing to fund 60% of cost and the SBA###-###-#### % of cost, technically you could do a project as large as about $16.7 million and the SBA 504 piece would only be $5 million of the transaction.
You can also combined the SBA 504 loan product with the SBA 7A product. Every dollar of SBA 7A debt counts against your SBA limit, but again only the SBA 504 dollars on the real estate or equipment purchase count against your limit, which cannot be more than 40% of cost. So you can get total loan dollars that are above $5 million by combining both products, but the total SBA exposure you would have will not exceed $5 million.
Under the SBA 504 program if you buy or own a business in a manufacturing NAICS, you can technically qualify for an additional $5.5 million in real estate or equipment financing multiple times again in the future for that same business. You must wait I believe at least 6 months before you can seek additional SBA 504 financing for your business.
You can now also get additional tranches of SBA 7A financing if you buy additional businesses in different NAICS codes so long as the first three digits of the NAICS code are different from the business(es) that you already own. So technically you can have more than $5 million in individual SBA guarantee exposure so long as it is for different businesses in completely different industries. However, your SBA exposure to any one business or transaction is not higher than $5 million.. This is new and not all lenders are really doing this, but we know lenders that are.
There is also a USDA Government Guarantee program where you can do loans up to $50 million. The amount of the government guarantee is tiered and the larger the loan the lower the guarantee amount. However, when doing USDA loans you must be fully secured by hard collateral at normal advance rates. So you cannot use a USDA loan to fund the goodwill value of a business acquisition. You also need the location of the business to be in a rural market to qualify for USDA financing. However, 95%+ of the country qualifies as rural for USDA purposes, so you might be surprised what areas qualify for USDA financing. You can also use USDA dollars for funding other projects like retail centers, office buildings, and non-owner occupied properties in rural areas.
You could do a combination of USDA financing for equipment and real estate and then use SBA 7A financing to acquire the goodwill value of the business. Since they are different programs, the amount of USDA financing you have does not impact your available SBA financing and you can combined the two programs to complete larger projects.
I hope this helps provide some additional clarification on SBA limits and other guaranteed loan limits.. If you have additional questions, you can reach me at any time here or directly at redacted We work with all of these programs and can get creative in how we put financing together for each transaction.
from University of Southern California in Los Angeles, CA, USA
Even lenders with strong SBA capabilities, such as Live Oak Bank, typically cap their pari passu portion at $2.5 million / $3 million in most cases. To complete a $10 million purchase, the buyer would likely need a significant equity injection or a large seller note to bridge the funding gap. A potential financing structure for a $10 million acquisition could look like this:
• Equity Injection: $1,000,###-###-#### %)
• Seller Note: $1,500,###-###-#### %)
• SBA 7(a) Loan: $5,000,###-###-#### %)
• Conventional Loan: $2,500,###-###-#### %)
Let me know if you’d like to discuss this further. I’d love to help you find the right SBA lender for this deal. We work with all the major SBA lenders including all the major SBA pari passu lenders. The bank pay us after your loan closes, so this is a 100% free service for you. You can reach me here or directly at redacted You can also click here to schedule a meeting with me: https://cal.com/ishan-jetley-3d73m8/30min. Look forward to chatting!