SBA Loan Requirements

searcher profile

November 04, 2024

by a searcher from London Business School in Tel Aviv-Yafo, Israel

Can anyone recommend a source that offers a detailed overview and clear eligibility criteria for acquisition financing (SBA Loan)?

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Reply by a professional
from Bentley College in Miami, FL, USA
You can get this info directly from the SBA website: https://www.sba.gov/funding-programs/loans/7a-loans

SBA 7(a) Loan Program:

Purpose: This is the SBA's primary program for providing financial assistance to small businesses, including those seeking to acquire an existing business.

Loan Amount: Up to $5 million.

Eligibility Criteria:
- Operate as a for-profit business within the U.S. or its territories.
- Qualify as a small business under SBA size standards.
- Demonstrate a need for the loan proceeds.
- Show that the loan proceeds will be used for a sound business purpose.
- Not be delinquent on any existing debt obligations to the U.S. government.

Equity Injection: For business acquisitions, the SBA typically requires an equity injection of at least 10% of the total project cost.

Use of Proceeds: Funds can be used for various purposes, including purchasing an existing business, real estate, equipment, and working capital.
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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
If you would like to talk through it, we would be happy to educate you on the SBA lending program. The challenge is that there is the Standard Operating Procedure for the SBA, then there is additional guidance the SBA has provided on that procedure, and then you have the actual underwriting criteria most lenders use. So that are many details to be familiar with. You can reach me here or directly at redacted
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