SBA Seller Note Equity Injection Update

lender profile

May 10, 2023

by a lender from Pennsylvania State University in Tampa, FL, USA

Good morning Searchfunder,

I wanted to share some quick info on some of the SBA updates that have been a hot topic of conversation on this forum and in our industry at large.

Seller debt may be considered as part of the equity injection if it is on full standby for the first 24 months, rather than the life of the loan - ALSO if it has an interest only period, it can be considered equity when there is historical business cash flow available to make the payments, and at least a quarter of the SBA-required equity injection is from a source other than the seller.
Other changes as well, view the procedural notice here: https://lnkd.in/g-Ty6_qe

Give me a shout to discuss!

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commentor profile
Reply by a searcher
from Babson College in Raleigh, NC, USA
Does First IB do 5%/5% seller debt/buyer equity deals currently? Are there plans to adapt the new SBA guidelines wrt treatment of seller debt as equity?
commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Please note these changes do not go into effect until 8/1/23 and there could be additional changes prior to the effective date.
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+8 more replies.
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