Stay up to Date on SBA Acquisition Financing

This blog explains what happens after you sign a Letter of Intent (LOI) to buy a business using an SBA 7(a) loan. It covers each step in the post-LOI process from due diligence to closing with timelines, key requirements, and tips to avoid delays and close your deal smoothly.

This post explores the pros and cons of using SBA loans to acquire a business. On the pro side, SBA 7(a) loans offer lower down payments, longer repayment terms, and flexibility for a wide range of businesses—making them one of the best tools available for wealth building through acquisition. However, there are cons to consider, such as taking on debt and the requirement for personal guarantees from any buyer with 20%+ ownership. While SBA loans are often the best option for most business buyers, it’s important to understand the risks and evaluate whether you’re comfortable with debt or better suited to an all-cash or investor-backed deal.

When structuring a business acquisition, buyers typically prefer asset sales over stock purchases due to liability protection and a fresh start with a new legal entity. However, many buyers make a critical mistake by listing assets too specifically in their purchase agreement. This blog explains why your asset purchase agreement should broadly define the assets being acquired and exclude only specific items the seller retains. Doing so prevents miscommunication, protects you from losing essential business tools, and keeps lenders aligned during underwriting. Learn how to avoid a costly oversight and set up your acquisition for success.

In this edition of The Buyer Advocate, we highlight five best practices that many business buyers overlook—often at the cost of their deal. From early landlord communication to net working capital agreements, down payment documentation, LOI exclusivity, and tax clearance letters, each tip is designed to help you avoid delays, surprises, or full-on deal failures. Whether you’re a first-time buyer or deep in your acquisition journey, these practical insights will help you navigate the SBA financing process and keep your deal on track.

In SBA 7(a) business acquisition financing, liquidity is leverage. Your available cash and liquid assets form the foundation for determining how much business you can afford to buy, how lenders view your risk profile, and whether your deal is ultimately fundable.

The clock is ticking on closing your business acquisition before the year’s end. In this post, we outline the crucial steps you need to take to stay on track and avoid delays. From getting your signed LOI by October 1st to assembling your deal team and understanding the equity raise process, we’ve got you covered. Make sure you’re ready to close the deal and start 2025 with a fresh slate.

With Q3 halfway over, now is the time for SMB buyers to prepare for a year-end closing. In this issue of The Buyer Advocate, we outline the key milestones to hit—starting with a signed LOI by October 1st—to ensure your acquisition is completed before 2025. The article covers assembling your deal team, raising equity, navigating regulatory hurdles, and assessing your personal readiness to take the entrepreneurial leap. It also highlights risks that can stall or kill deals and offers actionable advice to stay on track. A must-read for serious buyers aiming to hit the ground running in the new year.

In this edition of The Buyer Advocate, we dive into the step-up basis—a key concept in structuring small business acquisitions. Step-up basis allows buyers to revalue a business’s assets to market value, increasing depreciation benefits and reducing long-term tax liability. The post explores the difference between stock sales and asset sales, and how asset sales offer more favorable tax treatment for buyers. It also explains how “gross-up” payments may be used to offset the seller’s increased taxes when step-up structures are used. This is essential reading for anyone acquiring an SMB.

In this post, we break down the most common issues that derail small business acquisitions—especially from the buyer’s perspective. Whether you're navigating the underwriting process or preparing for closing, you'll learn about frequent pitfalls like poorly written business plans, incomplete equity raises, lease and licensing complications, surprise liens, and working capital disagreements. Backed by insights from Pioneer Capital Advisory, this guide offers practical tips to help acquisition entrepreneurs avoid costly delays and keep their deals on track.

In the SBA 7(a) business acquisition process, many buyers focus on interest rates and down payments. But there's one often overlooked factor that can make or break both loan approval and post-closing success: post-closing liquidity. This blog breaks down what post-closing liquidity means, why SBA lenders care about it, how much is typically required, and how to plan your transaction to retain enough liquidity to stabilize operations and meet lender expectations.

This week on The Buyer Advocate, we dive into Forgivable Promissory Notes (FPNs)—a unique form of seller financing that aligns buyer and seller incentives. FPNs allow a portion of the seller note to be forgiven if post-close performance targets aren't met, reducing risk for buyers and increasing potential upside for sellers. We cover how they’re structured, key metrics used for forgiveness, tax advantages, and their compatibility with SBA 7(a) loans. Whether you're a first-time buyer or an experienced operator, this post is a must-read for better deal structures.

This blog breaks down the entire SBA 7(a) loan financing process for business buyers into three key stages: pre-underwriting, underwriting, and loan closing. It covers the essential documents, roadblocks, and best practices at every step—starting from signing the LOI all the way to closing the deal. Whether you're a first-time buyer or an acquisition entrepreneur, this detailed guide will help you stay organized, avoid common pitfalls, and dramatically improve your chances of SBA loan approval.

SBA loan percentages and terms can vary depending on loan type, amount, and purpose—but they’re consistently more favorable than traditional financing. Whether you're using an SBA 7(a) loan to buy an existing business, secure working capital, or refinance debt, understanding rates, terms, and requirements is key to structuring a deal that protects your cash flow.

This article explores why a seller’s note is a critical part of structuring a successful business acquisition—especially when using SBA 7(a) financing. It breaks down how seller notes reduce risk, improve deal terms, and signal seller confidence. The post highlights different types of seller notes, such as contingent forgivable and standby notes, and explains why a seller’s refusal to offer one could be a serious red flag for buyers. Whether you're buying or selling a business, this guide explains why seller financing is a powerful tool in any deal.

Reasons to Use an SBA Loan Broker for Your Business Acquisition

This is a guest post by Eric Hsu, founder and owner of Clear Focus Law, PLLC. This post focuses on the benefits of engaging an attorney to help in your M&A transaction early in the process.