FAQs About SBA Loans for Business Acquisitions
- I’ve heard it is almost impossible to obtain SBA loans for business acquisitions and that it takes forever. Is that true?
- How much of a down payment does a buyer usually need to qualify for a SBA loan?
- How long will it take for a buyer to obtain a SBA loan to buy my business?
I’ve heard it is almost impossible to obtain SBA loans for business acquisitions and that it takes forever. Is that true?
No, neither is true. It is possible to obtain SBA loans for business acquisitions. From the time an offer is signed both ways, if all parties are cooperative, an SBA loan can be completed in about 40 – 60 days.
We understand how SBA loans are evaluated and the information the underwriters require to make decisions. We have relationships with preferred SBA lenders, which means the loan is underwritten by the lender. Preferred SBA lenders do not have to submit their loan application to the SBA for approval. They make the underwriting decision themselves within the guidelines established by SBA regulations.
And, we strive to help buyers through the SBA loan application process.
The horror stories you’ve heard about SBA loans probably result from individuals who have attempted to secure a SBA loan from a non-preferred lender. Those lenders, who handle very few SBA loans and are not as familiar with the regulations, must submit loan applications to the SBA for approval. It can be a time-consuming and frustrating process when working with non-preferred SBA lenders.
How much of a down payment does a buyer usually need to qualify for a SBA loan?
It depends on the nature of the business but it’s usually about 20%, but can range as low as 15% and as high as 25%.
How long will it take for a buyer to obtain a SBA loan to buy my business?
When dealing with a preferred SBA lender, and with good cooperation from all parties to the transaction, SBA loan approval can usually be obtained within 40-60 days.
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If you have a question, send an email to jim@bizowneradvisors.com.
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FAQs about Confidentiality, Advertising and Disclosures
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FAQs about Assets Included in a Typical Business Sale
FAQs about Negotiating the Price Terms and Structure of Offers
Jim Stauder, CPA (inactive) is the President of Biz Owner Advisors, LLC. He has been providing business brokerage services in the St. Louis Metropolitan area, including Metro East, since 2001.
