What documents do you need to buy a business with SBA?

You need the standard 7(a) package plus purchase documents. SOP 50 10 8.1, Appendix 20, Para. A.1.k and Appendix 15 set the list.

Purchase documents

• The buy-sell or purchase and sale agreement, with all schedules and amendments (Appendix 15, Para. A).
• A business valuation that meets Appendix 15, Para. C.1.a.
• A pro forma balance sheet for the business as of the transfer date.
• The seller's financial statements for the last 3 complete fiscal years, plus interim statements.

Due diligence by purchase size

• $350,000 or less. The lender may perform its own valuation, unless buyer and seller have a close relationship.
• $3,000,000 or more. Initial Acquisition and Business Expansion deals also need a Quality of Earnings report.

A valuation must be requested by and prepared for the lender. The lender may not use one prepared for you or the seller.

Other items that can apply

• A real estate appraisal, if property is part of the sale.
• Standby agreements, if seller debt will count as equity.
• A record of a site visit to you and to the business being bought (Appendix 15, Para. A).

Timing

On a non-delegated loan, the valuation and any Quality of Earnings report go in with the application. On a Preferred Lender Program (PLP) loan, they may be completed after the loan number issues, if formally engaged by then (Appendix 15, Para. D).