New SBA rules take effect June 1, 2025

Hello everyone! It’s been a while since we have posted anything. Last night, the SBA rolled out SOP 50 10 8. The new rules have significant changes effective 6/1/2025 and will dramatically alter how seller financing and equity rollovers are treated in SBA-financed acquisitions. If you have a pending transaction involving a partial seller’s note, you must act quickly!  Here are the other takeaways: 

• Partial standby seller notes will no longer be permitted to count toward the buyer’s equity injection. 
• If a seller is doing a rollover of seller equity, they must personally guarantee the full SBA loan for two years following disbursement. 
• Reinstatement of a strict 10% equity injection requirement for a complete change of ownership. 
• Multi-step partial buyouts are now ineligible. 
• Seller notes are only allowed as equity if they are on full standby for the life of the loan and can only be 50%. 
• All owners must be US citizens or permanent resident (Green Card) holders. 

If you have a deal in place, you may be able to be grandfathered in by obtaining your SBA PLP number by 6/1/2025. Consult with your lender to confirm!