SBA loan rejected

by a searcher from University of South Carolina - Darla Moore School of Business

1 year ago

Are there stories of people who had their SBA loans rejected, and then used that as a basis to dramatically lower the price and with purely seller financing?  What is generally the best way of doing this?

I'm working on a deal which I know has red flags. I am 100% sure the bank will call these things out and reject the loan.  But, I want to use the rejection as leverage to offer a price which is 40-50% below ask.  I am basically looking only to acquire the contracts they have with their customers.

Is this unethical, stupid, or a waste of time? Or is it a commonly used practice by buyers?

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searcher from The University of Texas at Austin - Red McCombs School of Business

you're making an offer you know is not legit and which you have no intention of following through on? Planning to retrade? Yes this is unethical. Let me give you a hint about integrity, if you have to ask "is this ethical?" it probably isn't ethical.

1 year ago | like reply | 0 likes

searcher from Virginia Polytechnic Institute and State University (Virginia Tech)

I think this is a bit silly. If you can't qualify for a loan, that would be more of a reflection on you, in my opinion. Either you yourself aren't bankable, or you've created/agreed to a deal structure that doesn't make sense. If a bank thinks you're a bad bet, why would I, as a seller, have confidence? Banks are better at underwriting than me. If you're sure that a deal structure won't work, propose something that will. Believe me...any broker worth their salt knows their strike zone...they know what will work and what won't fly. If they're smart, they'll have educated their seller on probable deal terms. If the seller doesn't accept it, just depart in a friendly manner and ask them to reach out to you if anything changes. Check with the broker every couple of months to take his temperature. To answer your specific question -- unethical, stupid, or waste of time? Yes.

1 year ago | like reply | 0 likes

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