Acquisitions Anonymous - #1 for business buying, selling and operating cover image

Can we make an SBA loan pencil on a 5% margin business? - Acquisitions Anonymous 195

Acquisitions Anonymous - #1 for business buying, selling and operating

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The Advantages of an SBA Loan

With an SBA loan, there's kind of a little bit nicer math for a bank because of that SBA guarantee. So the actual cost of capital is a lot cheaper. And then they also have the advantage of being able to potentially sell 75 percent of the loan in the secondary market and accelerate their earnings on that. The banks essentially don't care about macro environment or even the creditworthiness of the borrower than they would otherwise without that backstop.

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