Business Acquisition Loans: Buy a Business with SBA (2026)

Why SBA is the Default for Business Buyers

The SBA 7(a) is the only widely-available loan that finances 100% of goodwill in a business acquisition. Conventional banks cap goodwill financing at 25-50% of enterprise value, forcing buyers to bring 40%+ equity. The SBA's 75-85% guarantee on 7(a) loans makes lenders comfortable extending well above conventional limits, which means buyers can acquire $2M businesses with $200K down rather than $800K.

Buyer Injection

10%

Minimum SBA rule

Max Loan

$5M

Per borrower 7(a)

Goodwill Financed

100%

Of purchase price

Typical Term

10 yr

7(a) acquisition

Acquisition Guides

Foundational

By Vertical

Related Hubs

How an SBA Business Acquisition Loan Works

A typical SBA acquisition deal: a buyer identifies an existing business with $500K to $3M in enterprise value, signs an LOI with the seller, and applies for SBA 7(a) financing. The lender underwrites both the buyer's ability to operate and the business's ability to support the new debt. Most deals close in 60-90 days.

The 10% Buyer Injection

The SBA requires at least 10% buyer equity in any acquisition. Of that 10%, at least 5% must be cash from the buyer (cannot be borrowed). The remaining 5% can be a seller note on full standby for at least 2 years (no payments to the seller during that period).

Seller Note Structures

Seller notes are common and serve multiple purposes. They (1) reduce buyer cash requirement, (2) keep the seller financially aligned with the transition, and (3) provide a credibility signal to the SBA lender that the seller believes in the business. The most common structure is a 5-7 year seller note at 6-8% interest, fully subordinate to the SBA loan, with no payments for the first 2 years.

Goodwill Considerations

Goodwill is the difference between purchase price and identifiable hard assets. In service businesses, professional practices, and many small businesses, goodwill is 60-90% of total purchase price. The SBA's willingness to finance 100% of goodwill is what makes 7(a) the dominant tool for business buyers. Lenders will require a business valuation (typically a USPAP-compliant report from a qualified appraiser) for goodwill-heavy deals.

        What buyers underestimate: working capital. The SBA loan funds the purchase price but the new owner needs cash for the first 60-90 days of operations. Always negotiate 3-6 months of working capital into the loan request, on top of the purchase price.
      

Industries That Work Well for SBA Acquisition

Established service businesses with 5+ years of operating history
Healthcare practices (dental, vet, medical — see medical hub)
Hospitality (hotels, motels — see hotels hub)
QSR & restaurant with strong unit economics (restaurants hub)
Service contractors (HVAC, plumbing, electrical, landscaping)
Distribution and light manufacturing
Self storage and special-purpose RE (self storage hub)

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