Will SBA cuts impact ability to get funding?

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?
from Parsons School of Design in Cuxhaven, Germany
📝 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.
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from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
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