Most small businesses in America change hands with an SBA 7(a) loan — it’s the default financing for buying a company. The 7(a) program can fund the purchase of a profitable business, including its goodwill, a partner buyout, and often the real estate the business occupies, all in one loan up to $5 million. Jaken Finance Group helps buyers get matched to an acquisition lender and can bridge the deal when speed decides who wins it. Request commercial financing or call (833) 264-7776.
Why 7(a) dominates business acquisitions
Two features make 7(a) uniquely suited to buying a business:
- It finances goodwill. Most small-business purchase prices are mostly intangible value — brand, customers, cash flow — not hard assets. Conventional lenders often won’t lend against goodwill; 7(a) will, which is why it’s the acquisition workhorse.
- Low down payment with seller-note flexibility. Expect roughly a 10% equity injection, but under June 2025 SOP rules, up to half of that requirement (5% of project cost) can come from a seller note on full standby. A motivated seller who carries part of the deal can cut the cash a buyer must bring, aligning incentives on both sides.
What an acquisition loan can include
A single 7(a) can wrap the whole transaction:
- The business purchase price (including goodwill)
- A partner buyout — buying out a departing co-owner’s share
- The real estate the business occupies (owner-occupied)
- Working capital to run the business after closing
- Closing costs and, sometimes, a modest post-close cushion
Bundling these avoids stacking multiple loans and gives the new owner one payment on a long amortization.
The process and what lenders look for
Acquisition underwriting focuses on whether the business can service the new debt and whether you can run it. Expect scrutiny of:
- The target’s financials — typically three years of returns and interim statements; the cash flow must support roughly 1.15x debt service after the new loan.
- A business valuation — SBA lenders order an independent valuation to confirm the price is supportable.
- Your background — relevant management or industry experience strengthens the file, especially for a first-time buyer.
- Ownership eligibility — as of March 1, 2026, all owners must be U.S. citizens or U.S. nationals residing in the United States.
A clean, well-documented file with a credible transition plan moves faster and finances more of the price.
How the seller note changes the math
The seller-note provision is worth understanding because it can make or break a deal. Say you’re buying a business for $1,000,000. A straight 10% equity injection means bringing $100,000 in cash — a real hurdle for many buyers. Under the June 2025 SOP rules, up to half of that requirement (5% of project cost, or $50,000 here) can come from a seller note on full standby — meaning the seller agrees to be paid back only after the SBA loan, and typically to receive no payments for a period. That cuts your cash to close to roughly $50,000 while keeping the seller invested in a smooth transition. It’s a powerful alignment tool: a seller confident in the business is often willing to carry a standby note because it signals quality to the lender and helps the sale close. A seller who refuses any standby note, by contrast, may be telling you something about how they view the business’s future. When you evaluate an acquisition, model both the all-cash equity scenario and the seller-note scenario — the difference in cash required can determine whether the deal is reachable at all, and a well-structured seller note is frequently the piece that gets a first-time buyer across the line.
Speed wins deals — so bridge it
The biggest risk in an acquisition isn’t usually approval — it’s time. A seller with multiple offers rarely waits 60–90 days for an SBA file to clear, and a competing cash buyer can take the deal. Jaken Finance Group’s answer is to bridge the acquisition now, closing in days, and let the SBA 7(a) refinance the bridge once approved. You lock the purchase on your timeline and still capture 7(a)‘s low down payment and long term as permanent financing. Compare the paths in commercial bridge loan vs SBA loan and bridge now, SBA later.
Get matched for an acquisition loan
Buying a business or a partner’s share? We’ll help you pursue the right 7(a) structure — and bridge it so a slow SBA timeline doesn’t cost you the deal. Request commercial financing or call (833) 264-7776.
Program details: SBA 7(a) terms & eligibility. Rates and rules change; verify current terms at application. Jaken Finance Group helps buyers structure acquisition financing and can bridge deals a seller won’t hold for the SBA timeline.