SBA Loan possible?
I have been looking at a few companies that I can acquire. These are SaaS companies. Here are the details:
- They have a healthy cash flow ~1M in revenue, 600k in SDE, and have been showing consistent growth in the last 3 years.
2. They are currently owned by non US citizens and hence I am assuming these cannot be funded by SBA - Priced to be around $2- 2.5M
Is there a way to get SBA funding for this acquisition? If not, what is a creative way to close this deal other than a full seller note?
I am wondering if we can negotiate something like this
- Negotiate an annuity deal or a hybrid deal with a balloon payment at the end of 2 years.
- Create a US entity with me (US Citizen) as the majority owner
- Acquire the assets of the company into this newly formed entity
- Use the 2 years to grow the company and start paying on the note.
- Build the history in 2 years for SBA to refinance the seller note - which will be used to do the balloon payment.
Is this possible to do? Would conventional loans or SBA lend money to refinance the note?
Thanks
Sreenath