Modifications to the SBA’s Standard Operating Procedure became effective January 1, 2018. Some of the changes that booksellers should be aware of include the following:
- The SBA has lowered equity requirements for acquisition loans. Now, banks are able to finance up to 90 percent of an acquisition, while only 10 percent must come from the buyer or a seller note. At least five percent must come in the form of cash from the buyer, while the other five percent can come in the form of a seller note.
- If this equity injection does come through a seller note, the standby rule is now extended to the life of the loan.
- Franchises may be eligible for SBA loan programs. A franchiser must appear on a centralized directory of franchises that are eligible for SBA financing.
Inc. highlights the fact that a recent SBA Performance Report has shown an increase in SBA 7(a) loans in the last three years, with the first fiscal quarter of 2018 reporting an increase of around 20 percent year-over-year.