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Is there anything a seller to do from a financing standpoint that can potentially line up lenders or sba guara

I see some listing tout SBA pre-approval etc. Wasn't sure if that was helpful and if it was what I had to do.

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The BAF Group LLC
MD

Whether a business has that kind of pre-approval is sometimes, but not always helpful. Saying the business is pre-approved sometimes only means that it has viable tax returns and shows a stable profit history for the past three years. What is quoted as an asking price in an advertisement does not necessarily guarantee that the pre-approval is for the price that is being asked. As an example, we have run into several scenarios where a business the Seller or Broker advertises a price for far, far higher than the SBA pre-approval stipulates. An SBA loan would not be provided at the higher price. And it is not the SBA that is giving the pre-approval - it is the Bank - so if the buyer ultimately goes for a loan of the bank that is different than yours, not only would your pre-approval be ignored, but it could lead to suspicion on the part of the buyer. As Brokers, we estimate asking prices that are extremely close to what the SBA normally approves, but we do not go through a process of attempting to gain a pre-approval, in advance. That is not to say we are right and everyone else is wrong; it is simply a different approach that appears to work for us.

Jan 13, 2016

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