SBA Loan Size Standards Kill RV Dealership Purchase & Financing

Today I received a call from a potential business buyer who had industry experience was trying to buy a RV dealership and needed an SBA loan to complete his transaction. It was an ideal buy - it had a provable annual adjusted net of $400K and the owner was selling for only $550K. Everything looked great with the deal until I received the tax returns . . .

After receiving the tax returns and financials - as I always do to make sure the financial aspects of the deal will qualify for SBA loan financing - I found that this dealership was grossing $13M annually on average over the past three years! This deal could not be financed due to that this small business was "too big" in the eyes of the SBA. The SBA has size standards based on annual revenues or the number of employees for all types of businesses.

Yes there are size standards for small businesses with the SBA and for this particular type of business - you can't have more that $6.5M in annual revenue for RV dealerships to qualify for business purchase financing.

Posted on September 27, 2009  |   Email This Blog Post   |   Print This Blog Post