SBA 7(a) financing may help qualified buyers acquire an existing operating business or complete certain eligible ownership-change transactions. The SBA 7(a) Loan Program permits financing for complete or partial changes of ownership, subject to SBA requirements and participating lender underwriting.
Potential Uses of Financing
Depending on the transaction, SBA business acquisition financing may support eligible costs such as:
- Purchasing an existing operating business
- Acquiring eligible business assets
- Complete or partial ownership changes
- Machinery and equipment associated with the acquisition
- Furniture, fixtures, supplies, and eligible inventory
- Working capital associated with the acquired business
- Acquiring, refinancing, or improving qualifying owner-occupied commercial real estate
- Certain eligible transaction and closing costs
- Multiple eligible business purposes within a single financing transaction
Final use-of-proceeds eligibility depends on the transaction structure, applicable SBA requirements, and participating lender underwriting.
What Lenders May Evaluate
Business acquisition transactions generally require a detailed review of the business, buyer, and proposed transaction.
Depending on the circumstances, participating lenders may evaluate factors such as:
- Historical and projected business cash flow
- Debt Service Coverage Ratio [DSCR]
- Purchase price and business valuation
- Buyer equity contribution
- Buyer management and industry experience
- Existing and proposed business debt
- Seller involvement following the acquisition
- Transaction structure
- Business and personal creditworthiness
- Financial statements and tax information
- Additional financial, legal, or operational due diligence where applicable
The applicant must be creditworthy and demonstrate a reasonable ability to repay the financing. Individual lenders may also impose underwriting requirements beyond SBA minimum standards.
Requirements vary according to the transaction structure, borrower circumstances, lender policies, and applicable SBA rules.
Important: SBA financing is subject to lender underwriting and SBA eligibility requirements. White Feather Capital LLC is not an SBA lender. See our SBA Business Financing Disclosure for additional information.