How to Use SBA Financing to Acquire a Business
How much does a Buyer need to put down? What is the structure of the deal?
Purchase Price $600,000
Estimated SBA Fees $11,000
Total Costs $18,000 (Bank & SBA fees can be financed into the loan)
Buyers Equity (15%) $90,000 (Buyer puts up $90,000 of their money at closing)
Seller Note (10%): $60,000 (Note: Standby note with the seller at closing for 2 years & subordinated to Bank)
SBA 7A Term Loan: $468,000
Term: Ten Years - No Pre-pay Penalty
Rate: 6.75% (Note: Interest rate is variable adjusting quarterly)
Monthly Payment: $5,374(Variable to Prime Rate)
Fees: Bank Fees, SBA Guaranty Fees & Attorney Costs
Security: Blanket first lien UCC position on all business assets of borrower (buyer).
Need an SBA Loan?
Contact Jim Peddle at 312-525-9622