SBA Loans To Buy A Software Company
In FY2026, SBA lenders made 46 loans totaling $67.3 million to buy existing software companies, an average of $1.5M per acquisition. Buy a software company with as little as 10% down. We take your deal to the SBA lenders that fit, from our network of 50+, and it costs you nothing.
Based on SBA 7(a) data through September 30, 2026. Acquisition loans are SBA 7(a) loans to businesses recorded as a change of ownership.
The Software Company Acquisition Market
IT service providers and software companies are bought for recurring revenue. Lenders like monthly contracts and low churn, and they look hard at customer concentration, ownership of the code, and the technical people who keep it running.
SBA lenders finance profitable software companies on historical cash flow, not growth projections. Subscription revenue, low churn and clean IP ownership make the case.
Acquisitions made up 26.9% of all SBA 7(a) dollars lent to software companies in FY2026, compared with 27.4% across all industries. Most SBA lending in this industry goes to expansions, real estate, refinancing or startups, so it matters to choose a lender that underwrites acquisitions often. The average acquisition loan was $1.5M, about 18% above the $1.2M average for business acquisitions nationally. Across every purpose, lenders made 554 SBA 7(a) loans for $250 million in the industry, with an average loan of $451K and a median of $200K.
20% of those loans went to startups or businesses under two years old and 1% to franchises. The most financed franchise brands were CMIT Solutions and TeamLogic IT. By dollars, California, Texas and Florida led the industry. Loan count was down 37% from FY2025, partly because FY2026 had no October 2025 approvals during the federal shutdown, so it covers about 11 months. Software companies rank #36 of the 77 industries in our buy a business by industry guide by number of acquisition loans.
Based on SBA 7(a) data through September 30, 2026.
SBA Loans In This Industry By Size
All SBA 7(a) loans to software companies, FY2026.
What It Costs To Buy A Software Company
There is no single price for a software company. The loan follows the cash flow. The most common SBA loan size in this industry was under $150K, while the most dollars went to loans of $2M to $5M. Acquisition loans ran larger than the industry average of $451K because they finance goodwill as well as equipment, inventory and working capital.
At the industry’s average acquisition loan of $1.5M, and a loan covering 90% of the project, the typical total project is about $1.6M, which includes the purchase price, working capital and closing costs. 31 loans in the industry, 42% of the dollars, were between $2 million and $5 million.
What you can borrow is set by earnings, not the asking price. SBA requires the business’s cash flow to cover all debt payments at least 1.25 times for an acquisition, measured on historical results. An independent business valuation must support the price on purchases above $350,000; if the price is higher than the valuation, the gap is filled with more buyer cash or a seller note on full standby.
Larger deals carry extra steps. When the Business Purchase Price, not counting real estate, is $3 million or more, SBA requires a Quality of Earnings report. The SBA 7(a) loan tops out at $5 million, and bigger purchases pair it with a conventional loan in a pari passu structure.
How Much You Need Down To Buy A Software Company
SBA requires a Down Payment of at least 10% of the total project cost on the purchase of a business, and the lender cannot reduce or waive it. You do not have to bring all of it in cash.
Up To Half From The Seller
A seller note can count for up to half of the Down Payment if it is on full standby, with no principal or interest payments for the life of the SBA loan. That means as little as 5% from you.
Your Savings, Gifts Or Retirement Funds
Cash that is not borrowed counts, including gifts and money from retirement accounts. Many of our buyers use a retirement funds structure.
Investors
Minority investors can fund part of the Down Payment. Anyone who owns 20% or more of the buyer personally guarantees the loan.
Example: A Software Company At The Industry Average
| Total project (price, working capital, closing costs) | $1,626,000 |
| Down Payment (10%) | $163,000 |
| From the seller (note on full standby, max half) | Up to $81,000 |
| From you (cash, gifts, retirement funds, investors) | From $81,000 |
| SBA loan | About $1,463,000 |
Built from the $1.5M average acquisition loan for software companies in FY2026. Based on SBA 7(a) data through September 30, 2026. Illustration only; your lender sets the final structure, and some lenders ask for more than 10%.
Get A Pre-Qualification Letter Before You Make An Offer
Sellers and brokers move faster with buyers who can show they are financeable. Our letter takes a few minutes to request.
What Lenders Look For In Software Companies
SBA lenders finance profitable software companies on historical cash flow, not growth projections. Subscription revenue, low churn and clean IP ownership make the case. Beyond the industry specifics, every SBA acquisition is judged on the same core questions.
Recurring Revenue
Managed service contracts and subscriptions are the heart of the value. Lenders look at monthly recurring revenue and churn.
Customer Concentration
A few large accounts can be a large share of revenue. Lenders want to see that spread.
Ownership Of The Code
For software, the company must own its code and trademarks. Lenders confirm assignments from developers and contractors.
Key Technical People
Lenders want to know who keeps systems running and whether they are staying.
Cash Flow Coverage
With few hard assets, the loan is sized on historical cash flow, not projections.
Cash Flow That Covers The Loan
SBA sets the minimum at 1.25 times the debt payments for an acquisition, using the last fiscal year or the average of the last two. Projections can be reviewed but cannot be relied on to meet it.
Lenders also look at you: management experience that fits the business, personal credit, and current taxes and debts. Owners of 20% or more of the buyer personally guarantee the loan.
What To Check Before You Buy A Software Company
Due diligence protects your Down Payment and speeds up underwriting, because lenders ask for most of this anyway. Start these items as soon as your letter of intent is signed.
How Software Company Acquisitions Are Structured
Every SBA acquisition follows SOP 50 10 8.1, the SBA rulebook in effect for applications from October 1, 2026. Within those rules, the structure is built around the business’s cash flow, the seller’s goals and how much cash you want to keep.
10% Down, Part From The Seller
Most software company deals combine buyer cash with a seller note. A seller note on full standby counts for up to half of the 10% Down Payment; a note that is paid during the loan must fit the cash flow alongside the SBA payment.
10-Year Term, 25 For Real Estate
The business portion repays over up to 10 years with no balloon. Real estate bought with the business can run up to 25 years, in a blended loan or a separate one.
Investor-Backed Deals
Software and IT acquisitions are often investor-backed. Minority investors can fund part of the Down Payment, and anyone owning 20% or more personally guarantees the loan.
Working Capital Line
Many buyers add an SBA Express or other line of credit at closing, so the business has cash for payroll, inventory and receivables from the first day.
Quality Of Earnings At $3M
When the Business Purchase Price, not counting real estate, is $3 million or more, the lender needs an independent Quality of Earnings report in addition to the business valuation.
Above $5M: Pari Passu
The SBA 7(a) loan is capped at $5 million. Larger acquisitions pair it with a conventional loan that shares the collateral equally, with the same 10% Down Payment on the total project.
The seller cannot stay on as an owner or employee, but can consult for up to 24 months to hand over customers, staff and know-how.
Recent Deals We Closed In This Industry
Real loans GoSBA placed. Borrower and lender names are kept private. GoSBA funded $320M across 126 loans in 2025, working with 50+ lenders.
Healthcare And Insurance SaaS Company
Investor-backed search fund deal; seller note on standby
Construction Estimating Software Company
10% down
Digital Marketing & Software Agency
10% down from retirement funds
Top SBA Lenders For Software Company Acquisitions
Among the 15 largest SBA lenders to software companies by dollars in FY2026, these made the most acquisition loans. The best lender for you depends on deal size, your experience and the structure, which is why we take each deal to the lenders that fit.
| Lender | Headquarters | Acquisition Loans | All Loans In Industry |
|---|---|---|---|
| Pathward | Sioux Falls, SD | 4 | 7 |
| Live Oak Banking Company | Wilmington, NC | 4 | 17 |
| First Internet Bank of Indiana | Fishers, IN | 4 | 9 |
| Truliant FCU | Winston-Salem, NC | 4 | 4 |
| The Huntington National Bank | Columbus, OH | 4 | 15 |
| Bank of America | Charlotte, NC | 2 | 11 |
| Newtek Bank | Miami, FL | 1 | 102 |
Based on SBA 7(a) data through September 30, 2026. See the full ranking of SBA lenders for software companies
How It Works With GoSBA
One team from pre-qualification to closing. You never pay us; the lender does, after closing.
Get Pre-Qualified
Request a pre-qualification letter so sellers and brokers take your offer seriously. It takes a few minutes.
Send Us The Deal
Once you have a business in mind, share the listing or letter of intent and the seller’s financials.
Lenders Compete
We package the deal and take it to the SBA lenders that fit, from our network of 50+. You choose the best offer.
Close With Us
We handle lender questions, third party reports and the closing checklist until the loan funds.
Documents You Will Need
Lenders ask for the same core package on every acquisition, plus a few items specific to software companies. We help you gather anything missing and send it to lenders in one clean package.
- Signed letter of intent or purchase agreement
- The business’s last 3 years of tax returns
- Year-to-date profit and loss statement and balance sheet
- Monthly recurring revenue and churn reports
- Customer list with contract terms
- IP assignment agreements
- Your last 3 years of personal tax returns
- Personal financial statement and resume
- Proof of your Down Payment funds
What Buyers Say
Early in my search they quickly provided a strong SBA pre-qualification letter that helped me stand out with sellers.
Many a loan broker couldn’t get our deal over the line but Ishan said he could and he delivered 110%.
Frequently Asked Questions
How much do I need down to buy a software company?
At least 10% of the total project cost, and SBA does not allow the lender to waive it on a business purchase. Up to half can be a seller note on full standby. At the industry’s average acquisition loan of $1.5M, that is a Down Payment of about $163K, with as little as $81K from you.
How big an SBA loan can I get to buy a software company?
An SBA 7(a) loan goes up to $5 million, and larger deals add a conventional loan in a pari passu structure. In FY2026 lenders made 46 acquisition loans to software companies, averaging $1.5M. Your amount is set by the business’s cash flow and an independent valuation.
Will an SBA lender finance a software company with no collateral?
Yes, if the cash flow covers the loan with room to spare. SBA does not decline a loan only for lack of collateral, but lenders take available business assets and sometimes personal real estate when the loan is not fully secured.
Can the seller stay on after I buy a software company?
Not as an owner or employee. The seller can work as a consultant for up to 24 months in total to transition customers, staff and know-how, and often carries part of the price as a seller note.
Which lenders finance software company acquisitions?
In FY2026, Pathward, Live Oak Banking Company and First Internet Bank of Indiana were among the most active acquisition lenders in this industry. The right lender depends on the size of the deal, your experience and the structure. We take your deal to the lenders that fit from our network of 50+.
What does GoSBA cost?
Nothing. We are paid by the lender after your loan closes, not by you.
Buy A Business In A Related Industry
Keep reading: SBA Business Acquisition Loans · SBA Pari Passu Loans · Buying A Business Guide · Best SBA Lenders For Software Companies · Closed Deals · Pre-Qualification Letter · All Industries
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