SBA loans are one of the most powerful financing tools available for small business acquisitions, allowing buyers to purchase companies with relatively little equity while benefiting from bank-like interest rates. However, SBA financing comes with strict rules that significantly influence how a deal must be structured. Buyers must understand requirements around equity injections, personal guarantees, collateral, debt service coverage, and the use of seller financing. Recent rule changes have also tightened how seller notes can count toward equity, forcing many deals to include more real buyer capital.
