By Susan Kite, Vice President, Signature Bank of Georgia, and
Kim Eells, Vice President, The Brand Bank
I. “This deal costs too much; I can’t get it financed.”
- SBA 7a Loans are guaranteed by the US Government, giving banks a higher comfort level to make a loan they may have denied as a conventional loan. SBA loan terms can be up to 25 years with no balloon. This means that your buyer only pays closing costs once.
II. “SBA Loans have too much paperwork.”
- All commercial loans require both business and personal financial information. SBA loans do have a few additional forms, but most of these just require a signature – and your lender may even help your buyer fill them out!
III. “I don’t have collateral to offer the bank.”
- SBA only requires that all available collateral be taken. Experienced business acquisition lenders understand that these loans have a high amount of goodwill. They look to the SBA guaranty to help offset that risk. There also may be other factors that help offset the risk such as your buyer’s experience, personal liquidity, and strong business cash flow.
IV. “SBA Loans take too long.”
- It may seem to take forever, but most SBA loans only take 6 to 8 weeks from term sheet acceptance to closing. An experienced lender will help you move things along.
V. “I tried to get an SBA loan, but the bank I went to said no.”
- While this could signal the end of your deal – all banks have a slightly different appetite for different types of loans. Suggest that your buyer not stop there. In fact, GABB’s Business Acquisition Lenders have a network of contacts. We can usually find someone interested in doing your deal!
Call us if you need a knowledgeable and experienced SBA lender who will work hard to get your deal closed.