SBA Loan Fine Print regarding refinancing

July 02, 2025
by a searcher from Indiana University, Bloomington/Indianapolis - Kelley School of Business in Long Beach, NY, USA
Instead of using an SBA loan to acquire the business we are looking at, we are potentially looking at utilizing alternative (more expensive) debt to close and then re-financing that debt with an SBA loan in 6 months.
This allows us to avoid the SBA requirements of either forcing the seller to leave within 12 months if we acquire 100%, or avoiding minority partners and the seller have to personally guarantee the loan if we do a partial buyout.
The seller wants to stay on and the business is more valuable with him doing so.
Just as a sanity check - paragraph a) here from the SBA's SOP means that you can still refinance within 24 months, you just can't refinance the seller note within 24 months?
Any lenders here have experience with this?


from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
from Indiana University (System) in Carmel, IN, USA