Will SBA cuts impact ability to get funding?

searcher profile

March 26, 2025

by a searcher from The University of Michigan - Stephen M. Ross School of Business in Chicago, IL, USA

https://www.sba.gov/article/2025/03/21/small-business-administration-announces-agency-wide-reorganization

Curious to hear from current searchers / finance professionals:

With the SBA’s announced reorganization and significant headcount reductions, how do you anticipate this will impact searchers' ability to secure 7(a) loans, if at all? Are there specific aspects of the SBA process or lender dynamics that you think will be most affected?

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commentor profile
Reply by a searcher
from Parsons School of Design in Cuxhaven, Germany
Hey 👋🏻 fellow acquisition adventurer, thanks for your curiosity!

📝 Here's a quick primer on the key differences between US and EU-based searches:

1. Disclosure and Warranties: In the US, sellers spill their guts with extensive representations and warranties. In Europe, it's more "buyer beware" - so sharpen those due diligence skills!

2. Deal Breakers: US buyers have more escape hatches with termination clauses and "material adverse change" provisions. Europeans are more committed - once you're in, you're in!

3. Regulatory Hurdles: In the US, you'll dance with CFIUS for foreign investments. In Europe, prepare for the European Commission's competition review tango.

4. Negotiation Style: Americans are direct and deal-focused, while Europeans prefer a slower waltz of relationship-building.

5. Financing: US deals often ride on equity, while European transactions love their bank loans and debt syndication.

6. Company Size: European businesses tend to be smaller on average, so adjust your search parameters accordingly.

7. Energy Costs: European industrial energy costs are higher, so factor that into your projections.

Remember, these are general trends and cultural differences - individual deals may vary.

📌 Follow me on SearchFunder, connect and subscribe to my LinkedIn newsletter.
commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Jeff, we are not anticipating any impacts to the ability to get SBA financing. First off, the SBA loan programs are very popular on both sides of the aisle and you have a President that is pro-business. Secondly, it appears most of the cuts so far have been in other departments within the SBA and not so much on the SBA 7A and SBA 504 lending side. Third, the majority of SBA 7A loans are done through what are referred to as PLP lenders (Preferred Lender Providers). These lenders have the authority to approve loans on behalf of the SBA and they just submit to the SBA for an authorization once approved, a process that is largely automated. So it should not impact the ability to get approvals.

The only place that could potentially see some impact is loans that are processed directly by the SBA. Certain loans, like the refinance of existing SBA debt, need to be processed by the SBA 7A directly and cannot be processed via PLP status. The SBA has done a great job improving that process over the years, but if there are employee impacts in that group that could slow down the processing of loans submitted directly to the SBA. But that is a very small percentage of SBA loans and is unlikely to impact anything you are doing.

If you have additional questions on the SBA process you can reach me here or directly at redacted
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