SBA Changes that will affect business owners and buyers.

If you’re thinking about selling your business, or buying one, in the next couple of years, this affects you directly.

On October 1, 2026 the SBA put new rules in place for acquisition loans. These loans finance the large majority of small and lower-middle-market business sales. Here’s what changed:

✓ Debt coverage is now 1.25x, measured on past earnings only. Lenders can no longer count projections. This is down from previous years

✓ A Quality of Earnings report is required for any business acquisition priced at $3 million or more. This new requirement will increase acquisition costs. Sellers should ensure their financial statements are accurate, clear, concise, and well supported.

✓ Seller notes count against the buyer’s debt coverage unless they’re on full standby for the life of the loan. This will decrease the amount t that can be barrowed and also reduce SBA write offs for default loans

✓ Business and real estate are financed on separate terms: 10 years for the business, 25 years for the real estate.

✓ Sellers can stay on for 24 months as a consultant, up from 12. This will be very helpful for buyers without a lot of industry experience

✓ Every add-back has to be documented. Owner perks you can’t prove won’t count. This loophole was bound to be closed.

✓ Passive investors, trusts and non-citizen owners face new restrictions. This change took place awhile ago and makes it harder for non citizens to use SBA financing

For questions about SBA financing for both business and real estate please contact Joel Nimar@ consulting@matchbooksusa.com