Buying a business is one of the most complex financial transactions most people will ever undertake. Layer in SBA financing — with its eligibility rules, documentation requirements, and lender-specific quirks — and you have a process that can overwhelm even experienced entrepreneurs.
That’s why serious buyers work with an SBA broker for business acquisitions. Not a generalist. Not their local bank. A specialist who does acquisition financing day in, day out.
This guide explains why acquisition deals are uniquely complex, how an SBA broker navigates that complexity, and what to look for when choosing one.
Why SBA Loans Are the Go-To for Business Acquisitions
SBA 7(a) loans dominate the business acquisition market for good reason:
- ✦10% down payment — compared to 20-30% with conventional financing, this dramatically reduces the buyer’s cash requirement
- ✦10-year terms — fully amortizing, so you get predictable payments and no balloon surprises
- ✦Competitive rates — typically prime + 1.75% to prime + 2.75%, well below alternative financing
- ✦Goodwill financing — SBA loans can finance the intangible value of a business (brand, customer relationships, systems), which most conventional lenders won’t touch
- ✦Seller note flexibility — SBA rules allow sellers to carry a portion of the purchase price, reducing the buyer’s equity injection further
For a $1 million acquisition, SBA financing might require $100,000 down. Conventional financing could demand $250,000-$300,000. That difference is transformative for most buyers.
What Makes Acquisition Deals So Complex
A standard SBA working capital loan is relatively straightforward: the business exists, it has a track record, and the lender evaluates it. An acquisition adds layers of complexity that multiply the ways a deal can go wrong.
Valuation and Deal Structure
The lender needs to confirm the purchase price is reasonable. This means:
- ✦Analyzing the business’s seller’s discretionary earnings (SDE) or EBITDA
- ✦Applying industry-appropriate valuation multiples
- ✦Evaluating add-backs (personal expenses the owner runs through the business)
- ✦Assessing whether the business can service the debt at the proposed purchase price
- ✦Structuring the deal to meet SBA requirements (asset vs. stock purchase, allocation of purchase price)
If the purchase price doesn’t pencil out — or if the deal structure doesn’t conform to SBA rules — the loan gets declined regardless of the buyer’s qualifications.
The Seller Note Question
Many acquisition deals include a seller note — a portion of the purchase price that the seller finances directly. SBA rules govern how seller notes interact with the loan:
- ✦Some lenders require the seller note to be on full standby (no payments for the first two years)
- ✦Others allow the seller note to be on partial standby (interest-only payments)
- ✦The terms of the seller note affect the buyer’s debt service coverage ratio
- ✦Seller note amount and terms influence how much equity injection the SBA requires
Getting this wrong can kill a deal. An SBA broker who’s structured hundreds of acquisition deals knows exactly how to navigate seller note requirements for each lender.
Buyer Qualifications
Unlike a refinance or working capital loan, where the existing business track record does the heavy lifting, acquisition deals place enormous weight on the buyer’s qualifications:
- ✦Relevant industry experience (or transferable management experience)
- ✦Personal credit score and credit history
- ✦Liquidity and net worth
- ✦Business plan demonstrating how the buyer will operate and grow the business
- ✦Resume and professional background
A buyer with a 720 credit score and 15 years of industry experience is a different proposition than a first-time buyer with a 680 score and a career change. Both can get funded — but they need different lenders, and that’s where a broker’s matching expertise matters.
The Timeline Pressure
Business acquisitions operate on deadlines. A Letter of Intent (LOI) typically gives the buyer 60-90 days to secure financing and close. In that window, you need to:
- ✦Complete due diligence
- ✦Secure SBA lender approval
- ✦Satisfy all loan conditions
- ✦Coordinate with attorneys, title companies, and the SBA
- ✦Close the transaction
Miss the deadline, and you risk losing the deal — along with the time and money you invested in due diligence, legal fees, and earnest money.
“Acquisition deals are a race against the clock,” says Ishan Jetley, founder of GoSBA Loans. “When a buyer comes to us with a signed LOI, we already know which lenders can move fast enough, which ones will love the deal, and which ones to avoid. That pattern recognition comes from closing 126 acquisition-heavy SBA loans.”
How an SBA Broker Navigates Acquisition Financing
Step 1: Pre-Qualification and Deal Structuring
Before you sign an LOI — ideally before you even make an offer — a smart SBA broker evaluates the deal:
- ✦Can this purchase price be supported by the business’s cash flow?
- ✦What loan structure makes sense (full SBA, SBA with seller note, SBA with equity injection)?
- ✦What will the monthly debt service look like?
- ✦What are the likely sticking points for lenders?
This pre-qualification prevents you from signing an LOI on a deal that can’t be financed — a mistake that costs buyers thousands in wasted legal and due diligence fees.
Step 2: Lender Matching
Not all SBA lenders are equal when it comes to acquisitions. Some key differentiators:
- ✦Industry appetite: Some lenders love service businesses; others avoid them. Some specialize in healthcare, franchises, or manufacturing.
- ✦Deal size: Lenders have sweet spots. A $500K acquisition and a $4M acquisition go to different lenders.
- ✦Speed: Some lenders close in 45 days; others take 90+. When you’re on an LOI deadline, speed matters.
- ✦Seller note flexibility: Lender policies on standby requirements vary significantly.
- ✦Rate: Within SBA guidelines, rates can differ by a full percentage point between lenders.
An experienced SBA broker with 50+ lender relationships can identify the 3-5 best-fit lenders within hours — a process that would take an individual buyer weeks of research and cold calls.
Step 3: Application Packaging
For acquisitions, the loan package must tell two stories: why the business is a good investment, and why the buyer is the right person to run it. The broker prepares:
- ✦Executive summary of the acquisition
- ✦Recast financials showing true owner benefit
- ✦Debt service coverage analysis
- ✦Buyer’s resume and experience narrative
- ✦Business plan with realistic projections
- ✦All required SBA forms and supporting documentation
Step 4: Multi-Lender Submission and Competitive Bidding
The broker submits the packaged deal to multiple lenders simultaneously. This serves two purposes:
- ✦Speed: If one lender declines or stalls, you have backups already in process
- ✦Competition: Multiple term sheets give you leverage to negotiate better rates and terms
Step 5: Closing Coordination
SBA acquisition closings involve multiple parties with competing priorities. The broker acts as quarterback:
- ✦Coordinating between the buyer’s attorney and the lender’s closing department
- ✦Ensuring the purchase agreement conforms to SBA requirements
- ✦Managing the transition of licenses, leases, and contracts
- ✦Tracking conditions and deadlines
- ✦Resolving last-minute issues that inevitably arise
Real-World Scenarios Where Brokers Make the Difference
The Industry Mismatch
A buyer with a corporate management background wants to acquire a landscaping company. Their bank declines, citing “lack of industry experience.” An SBA broker reframes the buyer’s transferable skills — P&L management, team leadership, customer acquisition — and matches them with a lender who values management experience over industry-specific knowledge. The deal closes.
The Overpriced Deal
A buyer agrees to purchase a business at a 4.5x multiple, but lenders are only comfortable at 3.5x. Rather than killing the deal, the broker structures a larger seller note on standby to bridge the gap, keeping the SBA loan at a financeable level. The buyer, seller, and lender all win.
The Speed Crunch
A buyer signs an LOI with a 60-day closing deadline. Their first lender stalls in underwriting at day 35. An SBA broker, who had already soft-circled a backup lender, pivots the deal and closes on day 58. Without the broker’s parallel process, the deal dies.
What to Look for in an SBA Acquisition Broker
- ✦Acquisition-specific experience. Ask how many business acquisition deals they’ve closed, not just total SBA loans.
- ✦Funded volume. Look for brokers who’ve funded $100M+ in SBA transactions — this indicates deep lender relationships and consistent deal flow.
- ✦Zero upfront fees. The best acquisition brokers don’t charge the buyer. They’re compensated by the lender at closing, which means their incentive is aligned with yours: close the deal on the best possible terms.
- ✦Speed of pre-qualification. A good broker can give you a preliminary assessment within 24-48 hours of reviewing your deal.
- ✦Lender network depth. For acquisitions, you need a broker with 30+ active SBA lender relationships at minimum.
“Every acquisition deal has at least one surprise — a lease that needs renegotiating, a financial statement that needs recasting, a lender condition that seems impossible until you know the workaround,” says Jetley. “Experience isn’t a luxury in acquisition financing. It’s the difference between closing and losing your deposit.”
When to Engage a Broker in the Acquisition Process
The ideal time to engage an SBA broker is before you sign the LOI. Here’s why:
- ✦The broker can confirm the deal is financeable at the proposed price
- ✦They can advise on deal structure (asset vs. stock, seller note terms, equity injection)
- ✦You can include realistic financing contingencies in the LOI
- ✦The broker can begin lender outreach while you complete due diligence, saving weeks
Engaging after the LOI is signed still works — brokers do it daily — but you’re starting the clock with less runway.
The Bottom Line
Business acquisitions financed through SBA loans are powerful — but the process is intricate, time-sensitive, and unforgiving of mistakes. An experienced SBA broker for business acquisitions brings the lender relationships, deal structuring expertise, and process management that turn complex acquisitions into closed deals.
If you’re buying a business and financing with an SBA loan, a specialized broker isn’t a nice-to-have. It’s your secret weapon.
Learn more about how SBA brokers work in our Complete Guide to SBA Loan Brokers.
