Financing
SBA Loan Business Acquisition Due Diligence Checklist
Prepare the buyer, business, valuation, financing, lease, license, equity, and closing evidence commonly needed in an SBA-financed acquisition.
A practical research brief from the Business Buyer Check learning library.
Who This Is For
Business buyers and advisers deciding what to verify, what remains unresolved, and what should change before closing.
What This Checks
- Buyer File
- Business Financial File
- Transaction File
- Valuation and Repayment Analysis
- Operating Continuity
Buyer File
- Personal financial statement, ownership, identification, resume, management experience, and required forms
- Credit, liquidity, guarantor, affiliate, and existing-debt information
- Documented source of equity injection and post-close reserves
Business Financial File
- Three years of tax returns and monthly financial statements
- Current year-to-date and trailing performance
- Debt, receivables, payables, inventory, working capital, and projections
- SDE or EBITDA bridge with evidence for adjustments
Transaction File
- LOI and purchase agreement
- Asset or equity scope and purchase-price allocation
- Seller note, standby, earnout, escrow, holdback, and assumed obligations
- Organizational approvals, ownership, and required consents
Valuation and Repayment Analysis
Lenders evaluate repayment ability and may require an independent valuation. Model cash flow after realistic owner compensation, debt service, working capital, capex, taxes, and stress. Program eligibility or lender approval does not prove the deal is a good investment.
Operating Continuity
- Lease term and assignment
- Licenses, permits, franchise or professional approvals
- Insurance, key employees, seller training, contracts, equipment, and environmental needs
- Lien payoff, collateral, title, and release mechanics
Confirm Current Rules with the Lender
SBA SOPs, forms, program rules, lender requirements, and transaction facts can change the file. Ask the lender for a written document list and sequencing plan before relying on an old checklist.
Illustrative Buyer Example
How a Buyer Would Apply This Guide
A seller’s headline earnings support the asking price, but the supporting records are incomplete. The buyer follows this guide to identify the missing inputs, reproduce the calculation, request independent support, model the downside, and convert unresolved items into offer protections rather than treating the claim as verified.
Classification: Illustrative analysis—not a live finding, valuation conclusion, or recommendation to buy.
Official Sources and Verification Routes
Use the exact legal entity, address, filing number, license number, facility identifier, or carrier identifier shown in the source. Access, coverage, fees, and update timing vary.
Frequently Asked Questions
Can an SBA loan finance buying a business?
SBA 7(a) financing can support eligible business acquisitions, subject to current program and lender requirements.
Does SBA approval verify the business?
No. Underwriting and eligibility are not a guarantee of value, performance, or absence of undiscovered risk.
What should be prepared first?
Prepare buyer financial and experience information, business tax returns and current statements, proposed terms, normalized earnings, lease and license facts, and the equity source.
This educational material is preliminary decision support, not legal, tax, accounting, lending, appraisal, or investment advice. Requirements and transaction terms vary; verify current rules with qualified advisers and official sources.
Recommended Next Step
Start with QuickCheck
Apply the guide to a live listing before paying for deeper diligence.
Start with QuickCheckYour next diligence questions
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