SBA loan for second acquisition
January 08, 2025
by a searcher from Yeshiva University - Sy Syms School of Business in Boca Raton, FL, USA
Greetings!
I've heard a bunch of people on podcasts (hosts and guests) talk about an "add-on" acquisition (for a business already financed through SBA) being 100% finance-able.
When I've spoken to a couple of actual lenders, including the lender on my first loan, they told me I still need to cover 5-10% percent of the equity. This is with the seller carrying 35% (not specifically structured on stand-by, but I think I'll be able to get the seller to agree to having some of it done this way).
So, anyone with experience in this - how does it really work? How can I get an an add-on 100% financed? Or is it not really possible?
Thank you!
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Now if the NACIS codes do not match, then you would need traditional down payments.
The other question that might exist is based on how long you have owned your existing business. Although there is no guideline in the SBA SOP on how long you need to own your business prior to doing an add-on with $0 down, some lenders might be concerned if you have not owned the business for very long and that might be why they are looking for equity down. In which case it is the lenders trying to mitigate risk versus an SBA rule. And other lenders do not provide the 100% financing even though it is allowed. Again, it is the lender's internal underwriting requirements being stricter than what the SBA will allow.
Happy to jump on a call and look a the opportunity you have and go over options. You can reach me here or directly at redacted Good luck landing your next opportunity.
from Bloomsburg University of Pennsylvania in Ambler, PA 19002, USA