Highest leverage.
Lowest cost.
SBA-backed.
The SBA 7(a) loan is the single best acquisition instrument for US buyers acquiring an ecommerce, SaaS, digital, or traditional business. Up to 90% leverage, 10-year goodwill amortization, and the most competitive senior-debt rates available.
Who
it's for.
SBA 7(a) underwriting is strict, but surprisingly legible once you know what the credit memo needs to say. These are the six gates every qualified buyer clears.
- US citizen
As of March 2026, every borrower must be a US citizen. Green card holders and LPRs no longer qualify under updated SBA rules. If you're a green card holder, FLEX and Capital Access may be the right programs.
- Post-close DSCR of 1.25x or better
The target business must show historical seller's discretionary earnings of at least 1.25x
- 10% equity injection
At least half must be buyer cash. The other 5% can come from a seller note on full standby for the life of the SBA loan.
- Eligible operating business
Ecommerce, SaaS, digital, and traditional operators with 2+ years of tax returns.
- No federal delinquencies
No defaulted student loans, tax liens, or prior SBA charge-offs. Personal credit 680+ is the practical floor.
- Full-time operator intent
SBA 7(a) is for owner-operators. Passive holdco structures are not eligible.
Terms & structure.
- Loan amount
- $750,000 to $5,000,000
- Term
- 10 yr goodwill / working capital · 25 yr when real estate is included
- Down payment
- 10% minimum; up to 5% may be a seller note on full standby
- Use of proceeds
- Business acquisition, partner buyout, and working capital.
- Rate
- Market-indexed, set on the term sheet after credit review. Adjusts quarterly.
- SBA guaranty fee
- Set per SBA's fee schedule in effect at close, financed into the loan
- Prepayment
- No penalty on terms under 15 years. SBA-standard schedule applies at 15 years and above.
- SBA guaranty
- 75% on loans over $150K, 85% at or below
- Collateral
- Required on all loans over $50K, all business assets and personal real estate, if available.
- Personal guaranty
- Required of every 20%+ owner and their spouse where applicable
Prequal
to funded.
- Prequalification
Once you submit your Personal Assessment Form and have a consultation call with one of our Senior Advisors, you will be provided a prequalification letter that you present to a seller or their broker.
- Full underwriting
Once you provide the necessary documentation, we will craft a credit memo and submit your loan to one of our very talented SBA Lending Partner underwriters.
- Approval & commitment
Commitment Letter is issued, signed by the borrower(s). 3rd party reports are ordered.
- Close & fund
Closing counsel drives documents, UCC filings, life insurance assignment, and the SBA authorization conditions, and SBA authorization is requested by the Lending Partner. Once conditions clear, funds typically wire about five days later. Total elapsed time depends on the SBA queue, third-party turnaround, and buyer document responsiveness.
Right structure
for the right deal.
Run this deal through SBA.
- ✓target is a US-owned & domiciled business with 2+ years of filed tax returns.
- ✓Buyer is a US citizen intending to run the business full-time (LPRs/green card holders ineligible as of March 2026)
- ✓Purchase price within the SBA 7(a) program range, where the leverage is most meaningful
- ✓Acceptable personal credit (680+) and available liquidity at roughly 10 to 15% of purchase price
- ✓historical DSCR of 1.25x or greater
- ✓timeline accommodates SBA underwriting, third-party reports, and the standard closing window.
SBA is not the right tool.
- ↗Buyer is a green card holder or LPR. They are ineligible for SBA financing.
- ↗Targeted US business but owned by foreign operators
- ↗Closing must happen in a short timeline
- ↗Deal structure isn't conducive to SBA guidelines
- ↗Buyer is seeking a more streamlined loan process.
- ↗When there is a seller equity roll and the seller is unwilling to guarantee the SBA loan as required, flex does not.
A recent close.
- Target
- 8-year Shopify DTC brand · home goods
- TTM revenue
- $6.4M
- TTM SDE
- $1.18M
- Purchase price
- $3.20M · 2.7x SDE
- Buyer equity
- $320K cash · 10%
- SBA 7(a) loan
- $2.88M · 25-yr amortization
- Rate
- Market-indexed, per term sheet
- DSCR at close
- 1.42x
- Signed LoI to wire
- 104 days
The buyer was a thirty-four-year-old ecommerce operator who had run a seven-figure Amazon brand for the previous decade. He had $420K in liquid cash, a 782 FICO, and a signed LoI on a Shopify DTC home-goods brand his wife had been a customer of for years. The seller wanted out cleanly, was willing to stay on for a twelve-month transition, and did not need a rollover equity piece.
“We had one other lender quoting, faster to close, but 250 basis points higher and a five-year balloon. The SBA stack cost me six weeks and saved me roughly $340,000 in interest over the hold. That is the whole deal.”
We structured the down payment as $320K buyer cash, eliminating the need for a seller standby note and keeping the closing table simple. Third-party business valuation came in at $3.25M, supporting the price. QoE (coordinated through our vetted provider) was clean on SDE and flagged one working capital normalization we built into the model. The SBA authorization issued on day 78. Wire cleared on day 104.
The seven
questions every buyer asks.
What is an SBA 7(a) loan?+
An SBA-backed loan typically used to finance business acquisitions, offering higher leverage, less stringent underwriting, and less collateral requirements than conventional financing options.
How much can I borrow?+
Loan amounts are available up to $5 million under the SBA 7(a) program. Borrowers can have multiple loans on multiple businesses up to $5 million as well.
What is the typical down payment?+
Most transactions require a minimum 10% buyer equity injection, though structure can vary based on the deal and historical cash flow of the business.
How long does the process take?+
Transactions can close in as little as 60 days, depending on deal readiness and expeditiousness of everyone involved.
Do I need industry experience?+
Relevant experience is preferred and strengthens approval, but strong transferable skills may also qualify.
What types of businesses qualify?+
Established, cash-flowing businesses with a track record of stable revenue and profitability are typically eligible.
Is US citizenship required?+
Yes. Under updated SBA guidelines effective March 2026, all direct and indirect owners must be U.S. citizens with a principal residence in the United States. US businesses with any non-citizen ownership, including green card holders, are no longer eligible for SBA financing.
Ready to run your
numbers?
Send us the target and a rough LoI. We'll return a written SBA 7(a) prequalification covering indicative structure and what underwriting will ask for next.
The SBA 7(a) playbook
Everything the program page summarizes, at full length.
The Complete SBA 7(a) Business Acquisition Loan Guide (2026)
The complete guide to SBA 7(a) acquisition loans in 2026 — how the program works, who qualifies, equity injection mechanics, lender selection, and why deals get declined.
The First-Time Business Buyer's Complete Playbook
The complete first-time business buyer's playbook — from self-assessment through search, diligence, closing, and year-one execution. Everything first-time buyers need to know.
The Complete Guide to Business Acquisition Deal Structuring
The complete guide to business acquisition deal structuring — asset vs. stock purchase, seller notes, earnouts, working capital pegs, representations, and indemnification.
The Complete Guide to Business Acquisition Due Diligence
The complete business acquisition due diligence guide — financial, operational, legal, IP, and industry-specific diligence for acquisition buyers, with timeline and deal term implications.
The Complete Guide to Business Acquisition Financing Options
The complete guide to business acquisition financing — SBA 7(a), Capital Access, seller financing, ROBS, home equity, and how to choose the right option.