[WSBAPT] SBA Loan provisionw

[Ken Luce]

Greatly appreciated


From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Joshua McKarcher
Sent: Thursday, March 4, 2021 9:20 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] SBA Loan provisionw


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I have encountered this and, to my understanding, it is an SBA requirement at times when borrowers are buying a closely held business.

In our case, my seller client took a standard promissory note for 5-10 years or so at about 5% interest - and then there was a very simple SBA standard form that subordinated it to SBA/bank lender loan note.

It sounds awful, but once you look closer it basically is a "take it or leave it" deal IF your buyer requires SBA financing. In other words, if your seller has leverage to sell to a buyer who doesn't need SBA financing, then, fine, that is your leverage. Otherwise, this is SBA's way to ensure sellers have at least a little skin in the game.

Best, Josh

Joshua D. McKarcher
McKarcher Law PLLC
537 6th Street
Clarkston, WA 99403
(509) 758-3345
(509) 758-3314 (fax)
josh at mckarcherlaw.com<mailto:josh at mckarcherlaw.com>
www.mckarcherlaw.com<http://www.mckarcherlaw.com>
________________________________
From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> on behalf of Ken Luce <Ken.Luce at lucelawfirm.com<mailto:Ken.Luce at lucelawfirm.com>>
Sent: Thursday, March 4, 2021 8:35:15 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] SBA Loan provisionw




Am selling business for 1m plus.  Buyer wants 5% set aside until loan to buy is paid off in 10 years which could be extended.  Says it is SBA requirement.  I don't think so.  Could lender and buyer be in cahoots?



Ken Luce

Luce & Associates, P.S.

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