The Small Business Administration released new rule changes, which impact deal structures, in January of 2018.
- Key Change #1 - The borrower is required to inject equity of no less than 10% of the total project cost. Seller debt may not be used to meet this requirement unless the seller is willing to wait until the buyer fully pays off the SBA loan.
- Key Change #2 - The Ten Percent Equity Rule applies to every transaction regardless of sale price, loan size or intangible amount.
Look to a trusted business broker who can navigate these new rules and other lender policies to complete a successful transaction.
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