New SBA Rules Reshape How Acquisitions Get Financed
On October 1, the SBA’s updated lending rulebook, SOP 50 10 8.1, took effect. It applies to applications issued an SBA loan number on or after October 1, and the acquisition requirements now live in a standalone Appendix 15 with new categories, underwriting thresholds and documentation requirements. The bar is higher in several places. First-time buyers now need debt service coverage of 1.25x instead of 1.15x, and underwriting must rest on the company’s actual historical performance, not projections. Total debt is capped at the appraised business value, deals priced at $3 million or more require a lender-ordered quality of earnings report, and the business portion of every loan is limited to a 10-year amortization. Not every change tightens. The SBA simplified equity requirements for acquisition and owner buyout loans, a full-standby seller note can still count toward the 10% equity injection within a cap shared with other limited sources, and lenders can now finance part of an acquisition through a line of credit, which can lower the monthly term payment and leave the new owner working capital after closing. This Just In: SBA Releases SOP 50 10 8.1, Effective October 1, 2026 +7
For sellers in the MidSouth, the message is simple: clean, verifiable financials now drive both price and financeability. A company whose books hold up under a quality of earnings review, and whose historical cash flow comfortably carries the debt, will draw more qualified buyers and close with fewer surprises. For buyers, the structure of the deal (seller financing, equity sources, purchase price) has to be settled with the lender before the letter of intent, not discovered in underwriting. It is one more reason we believe deals are won or lost before they ever go to market.
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