Selling Your Business? Knowledge is Power: SBA and Business Acquisition Loans

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By Dave Caster, SBA Lending Specialist, Bank of Oak Ridge     (336) 286-1919

By Dave Caster, SBA Lending Specialist, Bank of Oak Ridge

(336) 286-1919


As an SBA lender for the past 24 years, I’ve worked a good number of business acquisition deals.  My clients have found that the SBA 7(a) business acquisition product is perhaps one of the best financing tools available to buyers purchasing small businesses. 

Why? Up to 90% of the acquisition can be financed for deals up to $5 million, with the SBA allowing some or all of the equity injection to be in the form of a seller-held note . . . and no worries about the collateral shortfall.  They also offer long amortizations, as well as the ability to roll all deal costs into the loan.

The end result?  A buyer can successfully acquire a business, spending little or no money.

Some buyers know this.  Many sellers do not.

My goal is to educate sellers on the lending options available that enable a successful transaction.  

So for the seller who is ready to hand the business down to a key employee or family member, the SBA product is a great option because typically, without SBA support, this is not possible.  While the heir apparent may possess all the skills necessary to lead the firm, they may not have the cash or borrowing power to get the deal done.

As a banker, these deals are the most satisfying. The business remains intact, in town, and with an enduring legacy firmly in place.   The business wins, the new owner wins, the community wins, and the seller walks away with cash and peace of mind.

For the seller seeking an internal buyer, this allows the heir apparent to be hand-picked, groomed, and put in place without having to resort to taking back a sizeable seller-held note. 

For the seller seeking an outside buyer, the ability to empower the buyer with financing options can be a key component to completing the deal. 

The next step?  If an SBA lending option sounds like it might be a fit for your particular situation, give me a call or send me an email.  I’d be happy to provide the knowledge necessary to give you the power.

For more information about your SBA loan options, please visit