SBA Loans and Buying a Business in St. Augustine, FL
Short answer: The most common way to finance a small business purchase in St. Augustine is an SBA loan, which the government partly guarantees, with the lender setting the down payment and terms. The lender reviews both the buyer and the business, so documented cash flow in your tax returns matters, and closing usually takes longer than in a cash deal. SBA financing widens the buyer pool and lets buyers pay full market value, but its rules change, so verify current requirements with the SBA or an SBA lender.
If you’re selling a business in St. Augustine, understanding how buyers typically finance their acquisition is essential. The most common method for financing small business purchases is an SBA (Small Business Administration) loan, specifically the SBA 7(a) loan program. I’m Ryan C. Winter, Business Broker with Truforte Business Group, based in St. Augustine and working with owners across Florida, and I work closely with buyers, sellers, and SBA lenders throughout every transaction. Here’s what you need to know.
Source: U.S. Small Business Administration, including its 7(a) loan program page and its SOP 50 10 lending rules. SBA rules change, so verify current requirements with the SBA or an SBA lender before relying on them.
What is an SBA 7(a) loan?
An SBA 7(a) loan is a government-backed financing program that commonly finances business acquisitions, with the lender setting the down payment, terms, and requirements within SBA rules. The SBA guarantees a portion of the loan, which reduces the lender’s risk and allows buyers who don’t have the full purchase price in cash to complete an acquisition. For sellers, this means a much larger pool of qualified buyers, not just those with significant liquid capital.
What SBA lenders look at when approving a business acquisition
SBA lenders evaluate both the buyer’s creditworthiness and the business being acquired. For the business, lenders want to see a track record of consistent, documented cash flow that can support the loan payments. They’ll request tax returns, profit and loss statements, and sometimes bank statements. If your business’s financials aren’t clean and consistent, it can affect the buyer’s ability to secure SBA financing, even if the buyer themselves is well-qualified.
I help sellers understand how their financials will be viewed by SBA lenders and what steps they can take to improve lender confidence before going to market.
The SBA process adds time: Plan for it
SBA-financed deals typically take longer to close than cash deals. From the time a buyer applies for SBA financing to the time funds are disbursed, the timeline depends on the lender and how complete the file is. I factor this into the deal timeline and work with lenders who specialize in business acquisitions to keep the process moving as efficiently as possible.
SBA financing benefits sellers too
Some sellers wonder whether they should prefer cash buyers over SBA-financed buyers. In practice, SBA deals close reliably when the buyer and business are both well-qualified. The larger benefit is that SBA buyers can pay full market value, sometimes more, because they have access to leverage. A cash buyer, by contrast, may demand a discount to offset the risk of tying up their own capital. I evaluate every offer carefully to help sellers understand the true net value of each scenario.
Work with a broker who understands SBA
Navigating SBA financing requirements is one of the areas where an experienced business broker adds significant value. I work with a network of SBA lenders active in the St. Augustine and Northeast Florida market and know how to structure deals that meet lender requirements while protecting sellers’ interests. Call (904) 789-1276 (Truforte Business Group) or visit ryancwinter.com/contact to learn more.
Related reading
- The SBA Loan Process for Buying a Business in Northeast Florida: What to Expect
- What Is Due Diligence When Buying a Business in Florida?
- How to Prepare Your St. Augustine Business for an SBA-Financed Sale: 6 Steps
Disclaimer: This article is general information, not legal, tax, accounting, or financial advice. I am a licensed business broker, not an attorney or accountant. Every business and every sale is different, and laws and tax rules change, so talk with a licensed attorney and a CPA about your situation before you act on anything here. SBA loan rules also change, so verify current requirements with the U.S. Small Business Administration or an SBA lender.
