SBA pre-qualification (Live Oak, Pursuit, Huntington, Newtek)
What it is
Getting a specific SBA 7(a) lender to actually review your financials, credit, and the deal's terms before you're deep into a purchase agreement, so financing is a known quantity going into negotiations, not an assumption you're hoping holds up. Lenders differ meaningfully: some specialize by dollar volume in specific industry verticals, others do the highest deal count with a strong regional presence, some run nationwide online platforms, and others are mission-driven community development lenders with programs for women-, minority-, and veteran-owned businesses. The right fit depends on your deal's size, industry, and geography as much as on rate.
Every SBA 7(a) change-of-ownership loan requires a minimum 10% equity injection from the borrower side. That injection doesn't have to be 100% cash. A seller note can count toward it under specific conditions covered in the seller financing guide, but every lender will confirm your liquidity and injection plan before they'll issue real terms, not just a rate sheet.
Why it matters
Deals fall apart in financing far more often than they fall apart in negotiation. A buyer who makes an offer before talking to a lender is effectively negotiating price and terms against an unknown. The deal might not be financeable as structured at all, and you won't find out until you've already spent weeks or months building a relationship with the seller.
What to look for
- No lender conversation started before making an offer
- Lender feedback that conflicts with the deal's assumed price, multiple, or structure
- Uncertainty about your own liquidity or how you'll cover the required equity injection
- Whether the lender you're talking to actually finances this specific industry and deal structure — not every SBA lender does
This guide is for informational and educational purposes only. It does not constitute legal, tax, financial, investment, or lending advice, and is not a substitute for advice from a qualified attorney, accountant, lender, or other licensed professional.