I’d draw your attention to Section B. i. (page 3). That is where the new requirements are broken out. These go into effect tomorrow (5/11).
We are still working to determine the whole meaning and how that will change our policy, but the highlights I am seeing are the following:
If you have a 10% seller note on standby for 24 months, the buyer potentially doesn’t need to bring cash.
Full-standby can be 24 months now rather than the life of the loan or I/O in nature, given cash flow.
Lender’s requirement for equity and equity injection must be consistent with its requirements for similarly-sized, non-SBA guaranteed commercial loans. However, the Lender may use its discretion to reduce the amount of equity.
When an existing business acquires a business in the same 6-digit NAICS code with identical ownership and in the same geographic area as the acquiring entity, SBA considers this a business expansion. SBA will not require a minimum equity injection.
Small loan size was increased to $500m.
It looks like sellers will need to PG if they own >=20% after the partial sale, and EI is not required for partial changes if biz bal sheet shows 9:1 DTW or better
Again more to come as to how this will change our policy, but an all-in-all, massive day for the SBA, and access to capital about a change of ownership will ease.