SBA lending - Owner's post-close involvement

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April 22, 2023

by a searcher in Dallas, TX, USA

Hello

There's a company i'm interested in buying.

what is the maximum allowable time for a seller to stay on board post-closing as allowed by SBA lending?

While it's not necessary for them to stay on board longer than 6 months it would definitely make things a lot easier for me in the long run for them to stay on as long as possible.

Also is there any type of pay/incentive structure you guys recommend in regards to making sure the owner is doing the best they possibly can post-close?

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Reply by a searcher
from Yeshiva University in Boca Raton, FL, USA
Within the last few weeks, there's been rule changes to SBA financing allowing more seller involvement. I'm not an expert - no experience actually :) - but definitely talk to your lender about the latest changes and how that can help.
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Reply by a searcher
from Rice University in Houston Heights, Houston, TX 77008, USA
I like structuring sellers notes that are tied to firm performance with a high, on par, and low performance payback. This leaves the seller in situation where they care more and want to stay involved longer.
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