Using an SBA loan on 2 concurrent deals in the same space?

April 29, 2024

by a searcher from University of Colorado at Boulder in Los Angeles, CA, USA

I am curious to understand whether people have experience with multiple SBA loans at the same time.

If the idea is to roll up two separate companies doing the same thing in the same market, will lenders give out two separate loans, one loan for both, or ask you to pick one deal at a time?

This feels a little messy to me, but if the companies align strategically and operate in the same geography, it seems to me it would actually de-risk the debt (to some extent) on each individual company. Wondering how others would approach debt financing in this scenario.

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

^redacted‌ thank you for tagging me. We have done multiple deals at the same time. It is not an issue to get two deals approved for merger with the same lender at the same time. So long as they are confident in your plan to move it forward it is doable. The biggest question is timing. If both are under LOI, then it makes sense to approve both at the same time. However, it is often easier to close them in separate loans unless you can get both parties aligned to close at the same time, but that is often hard to do. And then if one deal goes sideways or needs changes, it can delay the other deal's closing. We have even done it when they are not in the same NACIS code but are complimentary businesses. If you would like to discuss it in more detail you can reach me here or directly at redacted Good luck.

Reply by a searcher
from Texas A&M University in Austin, TX, USA

This will largely depend on the banks internal rules. I agree with Brad's comments that there could be benefit to closing as two separate loans so that one deal does not impact the other. It will be extra work post closing managing two loans but it is not the end of the world. I can certainly see a situation where having them packaged as a single loan and then one deal dying impacts the other negatively.

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