Posts tagged SBA Seller Note
Goodwill in Relation to SBA 7(a) Loans

Goodwill is an intangible asset that arises when a new owner purchases a business. Goodwill only arises when the new owner purchases the business for more than the tangible and intangible assets, minus the business’s liabilities. In general, SBA loans limit the amount of goodwill involved in a business acquisition, as the more goodwill involved in a transaction, the riskier it is for both the lender and the borrower.

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Seller Notes in Relation to SBA 7(a) Loans

A seller note is a loan given by the current owner of a business to a new buyer, often in order to bridge the gap between the amount of financing the buyer has and the purchasing price of the business. For example, if a business was being sold for $6 million, and the buyer only had $5 million in SBA 7(a) financing, the seller could provide a $1 million seller note in order to cover the difference.

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