I know that causing the purchase price to be adjusted via NWC being above the peg causes issues. Namely, that the loan is now potentially for a higher amount, with the buyer needing to bring more cash to the closing table.
What mechanisms can be used to handle this for SBA loans? Are post-closing true ups typically allowed?
Here's an example: let's say there's an inventory peg set at $100k. At closing, the business has $150k total inventory. The buyer doesn't have $50k to pay the seller at closing, and the bank doesn't want to (or can't for DSCR reasons) increase the loan. Will the lender allow $100k of inventory to be included at closing, with the remaining $50k retained by the seller and purchased by the buyer as it's used?
SBA Loans and Net Working Capital Adjustments
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by a searcher from Texas A&M University
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