SBA Financing
How SBA loans support business ownership transitions — eligibility, structure, and what to expect through the process.
In plain words
An SBA loan is a bank loan that the U.S. Small Business Administration partly guarantees. Because the government backs part of it, banks lend to buyers who could not get a regular loan, often with a smaller down payment and longer time to repay.
Step by step
- 1
Pick the right loan
An SBA 7(a) loan is the usual choice to buy a business (up to $5 million). An SBA 504 loan is for buildings and big equipment. In smaller towns, a USDA business loan may also fit.
- 2
Bring your share
Lenders ask the buyer to put in their own money, the equity injection, usually at least 10% when buying a whole business. Ask your lender whether part can come from a seller note.
- 3
Gather your papers
Personal tax returns, a resume showing relevant experience, and the business's last three years of tax returns from the seller.
- 4
Talk to an SBA lender
Choose a bank or community lender that makes SBA loans often. Our lender directory lists SBA banks and community lenders by city, with phone numbers.
- 5
Get approved and close
The lender reviews you and the business, may order a business valuation, and then funds the loan at closing.
In more detail
SBA loans — primarily 7(a) and 504 — are the backbone of small business acquisition financing in the United States. They let qualified buyers acquire a business with as little as 10% down, with the SBA guaranteeing a portion of the loan to the lender.
- 10% minimum equity injection (cash or rolled seller note)
- Up to $5M loan size, 10-year amortization for goodwill
- Personal guarantee from anyone owning 20%+ required
- Business and buyer must meet SBA eligibility criteria
- Often combined with a small seller note to bridge equity
A complete walkthrough with structure, examples, FAQs, and what to watch for.
Open the full guideCommon questions
How much can I borrow with an SBA 7(a) loan?
Up to $5 million. Many small business purchases are much smaller.
How much money do I need to put in?
Usually at least 10% of the project when buying a whole business. Your lender will tell you exactly what counts.
Can I combine an SBA loan with seller financing?
Yes. Many deals use an SBA loan for most of the price and a seller note for part of it.
Find help near you
BPM does not accept or store any paperwork. After your first phone call, buyer and seller exchange email addresses and share documents directly.
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