With new SBA Rules, Assuming I'm bringing 10% Equity, Can I Start Paying Seller Note Immediately?

searcher profile

July 05, 2025

by a searcher from University of California, Berkeley - Haas School of Business in New York, NY, USA

I've read through all the threads i can find and i want to make sure I'm fully understanding. We were always planning to bring 10% equity. I'm currently talking to a seller who is very concerned that with the new SBA rules, they won't get any of the sellers note until after we've fully repaid the SBA. From reading everything here, it sounds like the seller is wrong: as long as we bring 10% down, we can start repaying the seller's note immediately. Is that correct? Thanks!
3
15
309
Replies
15
commentor profile
Reply by a lender
from California State University, Sacramento in Seattle, WA, USA
If you bring in the 10% minimum equity, then the seller note can be paid from the beginning…subject to lender DSC requirements.
commentor profile
Reply by a lender
from Indiana Wesleyan University in Fishers, IN, USA
That is correct. If the seller note isn't equity, you can structure it however it makes sense for the transaction. If it is part of the equity, then it has to be fully subordinated with no interest or principal for the life of the loan.
commentor profile
+13 more replies.
Join the discussion