Terms for Non SBA loans

June 02, 2022

by a searcher in Chicago, IL, USA

I have a HVAC company I am negotiating with and I am expecting that we will agree to terms this week, we are working out some finer details. I am wondering what terms and interest rates everyone is seeing in the market for Non SBA loans?

The company achieving $1M in EBITDA and we settled on a 3.5 x multiple. I have a 20% deposit and would like a 7 year amortization schedule vs 5 years, if possible with no personal guarantee. Is this possible?

Thank you.

Reply by a searcher
from Columbia University in Jacksonville, FL, USA

Honestly, I don't know any entrepreneurs who haven't taken on Personally Guaranteed debt, unless they have Venture financing. The entrepreneurs I know that have a net worth > 25M all eclipsed 10M in PG'ed finance at one point or another. I'm not advocating it, but it's a good sign of conviction to investors and bankers.

Reply by a lender
from Concordia College, Moorhead in St Paul, MN, USA

It sounds like a nice performing company and you've got adequate capital into the transaction, however with traditional bank financing it will be difficult to finance all the blue sky without an SBA guaranty.

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