SBA Revises Good Will Caps

Effective with loan applications on or after October 1, 2009, the Small Business Administration revokes its position that acquisition financing is limited to buy-sells involving goodwill amounts up to $250,000.

NO GOODWILL CAP EFFECTIVE OCTOBER 1, 2009

Specifically, the SBA changed the rules for financing transactions involving goodwill:

a. If a transaction includes $500,00 or less of goodwill, a lender may process the loan using its delegated authority.

b. If the application includes more than $500,000 of goodwill and the borrower and/or seller have contributed a total of at least 25% equity, the loan also may be processed using a Lender’s delegated authority. (Seller equity is defined as seller financing that is on full standby (principal and interest) for a minimum of 2 years.)

c. If the loan amount includes more than $500,000 in goodwill and the borrower and/or seller are not providing at least 25% equity, then the application must be sent directly to the SBA for review and approval.

d. The amount of intangible assets financed with loan proceeds must be specifically identified in the Use of Proceeds section of the application.

WE CAN BRING THE SMALL BUSINESS BORROWER TO THE SBA PROGRAMS
Our company has a long history of successfully supporting financing requirements for our clients. SBA backed loans of $250,000 – $2,000,000 can be used to fund business acquisitions (goodwill), partner buy-outs, lines of credit (working capital) and certain small business applications. Our company can provide valuable experience toward securing this SBA funding for your business capital needs.

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