Do You Really Need an Attorney to Buy a Business?
Yes. Full stop. If you’re buying a business — especially with SBA financing — hiring an experienced M&A attorney isn’t optional. It’s essential.
An SBA business acquisition involves a complex web of legal documents: the Asset Purchase Agreement (APA), bill of sale, non-compete agreements, lease assignments, promissory notes, security agreements, and more. One poorly drafted clause can cost you hundreds of thousands of dollars. One missed issue in due diligence can saddle you with liabilities you didn’t know existed.
But here’s the thing: not all attorneys are created equal. Hiring the wrong lawyer for your acquisition can be just as damaging as not hiring one at all. A real estate attorney, a family law attorney, or even a general business attorney without M&A experience may not know the nuances of SBA acquisition transactions — and those nuances matter enormously.
This guide will help you ask the right questions, evaluate potential attorneys, and understand what your lawyer should (and shouldn’t) be doing throughout the acquisition process.
Essential Questions to Ask Before Hiring an M&A Attorney
1. How Many SBA Business Acquisitions Have You Handled?
This is the most important question you can ask. SBA acquisitions have specific requirements that general M&A attorneys may not be familiar with:
- SBA-mandated terms in the purchase agreement
- Requirements around seller notes (standby provisions, interest rate caps)
- SBA restrictions on deal structure (earn-outs, consulting agreements, non-compete payments)
- Lender-specific closing requirements that vary by institution
- Timing coordination between the SBA authorization, lender closing, and business transfer
An attorney who has handled 50+ SBA acquisitions will navigate these requirements efficiently. An attorney doing their first SBA deal will learn on your dime — and may create delays or issues that jeopardize the closing.
What you want to hear: “I’ve closed [specific number] SBA acquisitions in the past few years. I’m familiar with SBA SOPs, common lender requirements, and the typical closing process.”
Red flag: “I’ve handled business transactions” (vague) or “I can figure it out” (learning on your dime).
2. What Is Your Fee Structure?
Attorney fees for SBA acquisitions typically range from $5,000 to $15,000 for the buyer’s attorney, depending on deal complexity, location, and the attorney’s experience. Understanding the fee structure upfront prevents surprises:
- Flat fee: A fixed price for the entire transaction. This is the most buyer-friendly structure because you know your costs in advance. Common for straightforward SBA acquisitions.
- Hourly rate with a cap: The attorney bills by the hour but agrees to a maximum total fee. This gives you some cost certainty while allowing flexibility for complex issues.
- Hourly rate with no cap: The attorney bills by the hour with no limit. This is the riskiest structure for buyers because costs can escalate quickly, especially if complications arise.
- Retainer plus hourly: You pay an upfront retainer that the attorney bills against, with additional hourly charges if the retainer is exhausted.
What you want to hear: A clear fee structure — ideally flat fee or capped hourly — with a realistic estimate based on the specific deal.
Red flag: Vague answers about fees, reluctance to provide an estimate, or uncapped hourly billing without a clear rationale.
3. What’s Your Typical Timeline for an SBA Acquisition Closing?
Most SBA acquisitions close in 60–90 days from the signed Letter of Intent (LOI) to closing. Your attorney should be able to articulate a realistic timeline and commit to meeting it. Key timing questions:
- How quickly can you review and mark up the APA after receiving a draft?
- How do you handle document review during due diligence?
- What’s your availability for closing — can you accommodate the lender’s schedule?
- How do you handle time-sensitive issues that arise during the transaction?
What you want to hear: “I typically turn around APA review within 3–5 business days. I’m responsive to emails and calls, and I coordinate closely with the lender to meet closing deadlines.”
Red flag: Slow responsiveness during the initial consultation (it only gets worse once you’re a client), vague timeline commitments, or a packed schedule that could delay your deal.
4. Will You Handle the Entire Transaction, or Will It Be Delegated?
In larger law firms, the partner you meet during the consultation may hand your file to a junior associate. This isn’t always bad — associates do good work — but you should know who’s actually handling your deal day-to-day.
- Who will draft and review documents?
- Who will be my primary point of contact?
- Will the lead attorney be present at closing?
- If work is delegated, is the billing rate adjusted accordingly?
What you want to hear: Clear identification of who’s handling what, with the experienced attorney remaining actively involved in key decisions and document review.
5. How Do You Coordinate with the SBA Lender?
In an SBA acquisition, the lender’s attorney and the buyer’s attorney need to work together efficiently. Delays in document exchange, conflicting requirements, or poor communication between legal teams can push your closing date back weeks. Ask:
- Have you worked with [specific lender] before?
- How do you handle conflicts between the APA terms and the lender’s requirements?
- Are you comfortable with the lender’s closing documents and process?
What you want to hear: “I regularly coordinate with SBA lenders and their counsel. I understand the typical lender requirements and know how to align the purchase agreement with the loan documents.”
6. What Should I Expect in Terms of Due Diligence Support?
Your attorney plays a critical role in legal due diligence. Understanding what they’ll review — and what they won’t — sets proper expectations:
- Will you review all material contracts (leases, customer agreements, vendor contracts)?
- Will you conduct a lien and judgment search?
- Will you verify corporate good standing and authority to sell?
- Will you review intellectual property registrations and assignments?
- What do you NOT cover that I should hire other professionals for?
What Your Attorney Should Review in Every SBA Acquisition
Regardless of deal size, your M&A attorney should thoroughly review and negotiate the following documents:
The Asset Purchase Agreement (APA)
The APA is the central document in any business acquisition. It defines what you’re buying, what you’re paying, and the terms and conditions of the sale. Key sections your attorney should focus on:
- Purchase price and allocation: How the price is allocated among assets (equipment, inventory, goodwill, non-compete) has significant tax implications for both buyer and seller.
- Representations and warranties: The seller’s promises about the condition of the business. These are your primary protection against undisclosed problems.
- Indemnification: What happens if the seller’s representations turn out to be false? How long do you have to make a claim? What’s the cap on the seller’s liability?
- Closing conditions: What must happen before the deal closes (lease assignment, license transfer, lender approval, landlord consent).
- Post-closing obligations: Transition assistance, non-compete terms, seller note terms, consulting agreements.
Non-Compete Agreement
The non-compete prevents the seller from starting or working for a competing business after the sale. Your attorney should ensure:
- The geographic scope is broad enough to protect you
- The duration is sufficient (typically 3–5 years for SBA deals)
- The definition of “competing business” is specific and comprehensive
- The non-compete is enforceable under your state’s laws
- Adequate consideration supports the non-compete (and the allocation makes sense for tax purposes)
Lease Assignment
If the business operates from a leased location — which most small businesses do — the lease assignment is critical. Your attorney should review:
- Whether the lease allows assignment (some require landlord consent)
- Remaining lease term and renewal options
- Rent escalation provisions
- Personal guarantee requirements
- Whether the SBA lender requires specific lease terms (most do)
- CAM charges, maintenance obligations, and other tenant responsibilities
Seller Note Documents
Most SBA acquisitions include a seller note — typically 5%–10% of the purchase price. SBA rules impose specific requirements on seller notes:
- The note must be on full standby for a defined period (typically 24 months) or on partial standby with payments not exceeding certain thresholds
- Interest rate is usually capped
- The note must be subordinate to the SBA loan
- No additional collateral can secure the seller note beyond what secures the SBA loan
Your attorney should ensure the seller note complies with SBA requirements while protecting your interests.
Red Flags in an M&A Attorney
Watch out for these warning signs when evaluating potential attorneys:
- No SBA experience: This is a dealbreaker. SBA transactions have specific requirements that a general business attorney won’t know. The learning curve will cost you time and money.
- Hourly billing with no cap and no estimate: An experienced SBA attorney should be able to estimate total fees within a reasonable range. If they can’t (or won’t), you’re exposed to unpredictable costs.
- Slow responsiveness: If it takes 3–5 days to get a response during the consultation phase, imagine how frustrating it’ll be during a time-sensitive closing. Responsiveness is non-negotiable.
- Over-lawyering: Some attorneys create problems instead of solving them. If your attorney is raising dozens of unlikely worst-case scenarios without offering practical solutions, they’re adding cost and delay without adding value.
- Under-lawyering: On the flip side, if your attorney just rubber-stamps everything without pushing back on unfavorable terms, you’re not getting the protection you’re paying for.
- Conflict of interest: If the attorney has a prior relationship with the seller, the seller’s broker, or the lender, ask about it directly. Dual representation in an acquisition is almost never appropriate.
- No clear process: An experienced M&A attorney should be able to walk you through their process from engagement to closing. If they seem disorganized or vague about next steps, find someone else.
How Attorney Fees Fit Into Overall SBA Closing Costs
Understanding how attorney fees fit into your total closing costs helps you budget accurately. Here’s a typical breakdown of SBA acquisition closing costs:
- Buyer’s attorney: $5,000–$15,000
- SBA guarantee fee: Approximately 2.75%–3.75% of the guaranteed portion of the loan (can be financed into the loan)
- Business valuation: $3,000–$7,000
- Environmental report (Phase I): $2,000–$4,000 (if real estate is involved)
- Appraisal: $2,500–$5,000 (if real estate is involved)
- Title insurance and recording fees: Varies by location
- Lender’s attorney fees: $2,000–$5,000 (paid by the borrower)
- Miscellaneous: UCC searches, document preparation, courier fees, etc.
In total, closing costs for an SBA acquisition typically run 5%–7% of the loan amount. Some of these costs can be financed into the SBA loan, reducing your out-of-pocket requirements.
One cost you won’t have if you work with GoSBA? Loan brokerage fees. Our services are completely free to the borrower.
How GoSBA Helps You Build the Right Professional Team
At GoSBA, we do more than match you with an SBA lender. We help you navigate the entire acquisition process, including connecting you with experienced professionals who specialize in SBA transactions.
- Attorney referrals: We work with M&A attorneys across the country who specialize in SBA acquisitions. We can recommend attorneys who are experienced, responsive, and fairly priced.
- 50+ lender network: Our relationships with over 50 SBA lenders mean we can find the right financing for your specific deal — with competitive rates and terms.
- $320M+ funded in 2025: Our volume gives us leverage and insight that individual buyers simply don’t have.
- Free business plan and financial projections (a $2,500–$5,000 value): We prepare SBA-required business plans at no cost, saving you thousands and accelerating the lending process.
- Completely free service: GoSBA is compensated by lenders, not borrowers. You get expert guidance throughout the acquisition process without paying a dime.
- Closing coordination: We work closely with your attorney, the lender, and the seller’s team to keep the transaction on track and on schedule.
Ready to Buy a Business? Start With the Right Team.
The attorney you choose will be one of the most important decisions in your acquisition journey. Ask the right questions, look for SBA experience, and demand responsiveness and transparency on fees.
And when it comes to financing, GoSBA has you covered. We’ll find the right SBA lender, prepare your business plan, and coordinate with your attorney and other advisors to get your deal closed smoothly.
Contact GoSBA today for a free consultation. Let’s talk about your acquisition, your financing needs, and how we can help you build the team that gets the deal done.
