SBA Deal Survival Checker
The SBA changed the rules on June 1, 2025. Most sellers find out at the closing table. Find out now.
What changed:Under SOP 50 10 8 (effective June 1, 2025), a seller note only counts toward the buyer's down payment if you receive zero payments — no principal, no interest — for the entire 10-year SBA loan term. Interest-only periods no longer qualify. Partial seller notes are capped at 5% of project costs. Buyers must bring at least 5% in verified cash regardless of seller financing.
The deal
Start with your expected deal structure. Use rough numbers if you don't have exact figures yet.
The total purchase price you expect to negotiate — not including working capital or closing costs.
Leave blank to use the default (10% of price).
Why the 2025 Rules Change Matters for Sellers
Most discussions of SBA rules focus on the buyer'sloan — but the rules govern your deal. If your planned deal structure doesn't meet the 2025 requirements, your buyer's financing won't underwrite, the deal collapses, and you find out after you've signed an LOI and spent 90+ days in due diligence.
The seller note standby change is the most impactful. Under pre-2025 rules, a seller note with a short interest-only period still qualified as part of the buyer's equity injection. That's gone. Now “standby” means no payments of any kindfor the entire 10-year loan term. Sellers who plan to offer seller financing and receive early payments need to reprice their deal accordingly — or the buyer's loan simply won't close.
The 8 Rules This Tool Checks
10% Minimum Equity Injection
Every complete change of ownership requires a total equity injection of at least 10% of project costs (purchase price + working capital + fees).
Full-Standby Seller Note (The Big One)
A seller note only counts toward the 10% if it is on full standby — zero principal and zero interest — for the entire SBA loan term, documented on SBA Form 155, and covers no more than 5% of project costs.
5% Minimum Buyer Cash
The buyer must bring at least 5% of project costs in verified cash (bank statements, wire confirmations). Gift letters and ROBS rollovers have their own documentation requirements.
Seller Rollover = Personal Guarantee
If the seller retains any ownership post-closing, they must personally guarantee the buyer's SBA loan for 2 years. Most sellers choose 100% exits once they understand this.
Collateral Required at $50K+
Loans of $50,000+ require collateral. Lenders will lien business assets and may seek liens on buyer personal real estate if the loan isn't fully secured.
Citizenship / Residency (March 2026 Update)
The business must be 100% owned by U.S. citizens or lawful permanent residents for SBA financing eligibility. Applies to seller (if rolling equity) and buyer.
DSCR ≥ 1.25×
The business's Lender-Adjusted EBITDA must be at least 1.25× the buyer's annual SBA loan payments. If DSCR falls below 1.25×, the loan doesn't underwrite — and the maximum supportable price is often $100K–$400K below the broker's asking price.
Financial Documentation
Three years of business tax returns plus current interim statements. CPA-prepared financials are now acceptable in lieu of tax returns — a positive development for sellers whose tax returns understate performance.
Source: SBA SOP 50 10 8, effective June 1, 2025 and March 1, 2026 update. Rules verified current as of June 2025 — SBA SOPs are updated frequently. Confirm with an active SBA lender before structuring any transaction.
Frequently Asked Questions
What changed June 1, 2025 for SBA business acquisition loans?
SOP 50 10 8 made several seller-facing changes: seller notes only count as buyer equity if on full standby (zero payments) for all 10 years of the SBA loan; seller notes are capped at 5% of project costs; buyers must bring at least 5% in verified cash; and collateral is now required on loans $50,000+ (down from $500,000). The March 2026 update added citizenship/LPR requirements.
What is a full-standby seller note?
A seller note where you receive zero payments — no principal, no interest — for the entire SBA loan term (~10 years). This is the only type that counts toward the buyer's down payment. Interest-only periods don't qualify. It must be documented on SBA Form 155.
What is SBA Form 155 and why does it matter?
SBA Form 155 is the Standby Creditor's Agreement — the document that formalizes your full-standby note at closing. Without it, your seller note doesn't count as buyer equity regardless of what the deal documents say. Have your attorney prepare it before the LOI stage.
Can my buyer still use my seller financing as part of their down payment?
Yes — but only if the note is on complete standby (zero payments for 10 years, Form 155 required) and doesn't exceed 5% of project costs. The buyer must still bring at least 5% in verified cash. Any note above 5% of project costs is fine as seller financing, but doesn't reduce the buyer's cash requirement.
What is DSCR and why does it set my sale price?
DSCR = Lender-Adjusted EBITDA ÷ Annual SBA loan payments. The SBA requires ≥1.25×. Lenders calculate their own EBITDA — typically 20–40% lower than a broker's SDE number — so the maximum price a lender will support is often well below asking price. This is the #1 reason deals collapse after the LOI.
Do I have to guarantee my buyer's SBA loan?
Only if you retain any ownership post-closing. If you do a 100% exit, you are not required to guarantee the loan. If you roll over equity (even a small stake), SOP 50 10 8 requires you to personally guarantee the buyer's SBA loan for 2 years — meaning you're liable if they default.
Methodology — how every check is calculated
Project Cost = Sale Price + Working Capital + (Sale Price × 3% closing fees)
Required Injection = Project Cost × 10% (Rule 1, SOP 50 10 8)
Max Seller Note Credit = Project Cost × 5% (Rule 2 — 50% of required injection)
Qualifying Seller Note Credit = min(Seller Note, Max Credit) IF full standby + Form 155; else $0
SBA Loan Amount = Project Cost × 90% (since buyer covers 10% injection)
Annual Debt Service = Standard annuity formula at assumed SBA rate over 10 years
DSCR = Lender-Adjusted EBITDA ÷ Annual Debt Service. SBA minimum: 1.25×
Max Supportable Price = the purchase price at exactly 1.25× DSCR, back-solved from EBITDA and assumed rate
SBA rules: SOP 50 10 8, effective June 1, 2025; citizenship update effective March 1, 2026. Verify all rules with an active SBA lender — SOPs change frequently.
Find a broker who knows the rules
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SBA SOP 50 10 8, effective June 1, 2025. Citizenship update effective March 1, 2026. Verify rules with an SBA lender — SOPs change frequently.