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.
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.
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.
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