Get an SBA Loan – Updates

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Here are the most important updates that will impact how SBA loans are evaluated and issued:

1. Financial Requirements

  • A 10% minimum equity injection will now be required for both startup businesses and ownership transitions.

  • Seller financing may be used to help meet this requirement, but only if the seller note is on full standby for the entire term of the SBA loan. This may account for up to half of the required equity injection.

  • The “Credit Elsewhere” test is being reinstated, meaning borrowers will need to demonstrate they cannot obtain the loan under conventional financing terms.

  • Documentation requirements are being tightened for smaller loans, including the return of mandatory items such as tax transcripts, hazard insurance, and life insurance.

 

2. Change of Ownership Provisions

  • In the case of a partial change of ownership where the seller retains equity in the business, the SBA will now require that the seller provide a full personal guaranty for two years following the transaction.

 

3. Franchise Considerations

  • The SBA is reintroducing its official Franchise Directory.

  • Franchisors must submit all required documentation for inclusion by July 31, 2025. The current directory will remain in effect until then.

 

Why Choosing the Right Lender Matters More Than Ever

These changes make lender experience and capability more critical than ever. When choosing a lending partner, consider the following:

  • Lenders with SBA Preferred Lender status can process applications more efficiently.

  • Industry-specific expertise ensures the lender understands the nuances of your business.

  • A strong track record of navigating SOP changes shows their ability to adapt quickly and effectively.

  • Digital capabilities make document submission and loan processing faster and more streamlined.

  • Clear, ongoing communication helps reduce stress and confusion throughout the process.

 

If you’re preparing to buy, sell, or grow a business with SBA funding, now is the time to align with the right resources. Again, special thanks to Live Oak Bank and Jeff Katz for their commitment to educating and supporting the business community during this important transition.

Need help evaluating your SBA financing options or navigating this new environment? Let’s connect — we’re here to help

We get new listings all the time. Let’s keep in touch. Here are a few tools that might help you in your pursuit of the right business.

Register To Receive Weekly Emails With Listings Matching Your Interest  https://bbms.biz/listings/bbf-883/buy-enter.asp

Businesses for Sale with SBA PreQualification:   https://bizmls.com/listings/bbf-883/bus-lender.asp

Search site: BuyBizFL.com

Meet some great business advisors that can help you every step of the way at BTC  BTCTampa.com

What is a business Worth- Here is a quick resource to get a general idea of possible value: https://buybizusa.com/value-my-business/