Seven questions for your lender before you sign.
The SBA rules for a business purchase changed on October 1, 2026. Ask these seven questions before the letter of intent, so the file is shaped around the answers.
Free 30 minutes with ClarIQ Advisory. Family run. Human-reviewed work.
Seven questions, in the order to ask them.
Ask these before you sign a letter of intent. A lender can answer most of them in one conversation.
- 01
Which rules govern my file?
The new rules apply to applications SBA receives on or after October 1, 2026; earlier applications stay under the old ones. Ask the lender to confirm, in writing, which set your application falls under.
- 02
Does the business cover its payments on last year's results?
For a first-time purchase the SBA floor is now 1.25x: about $1.25 of earnings for every $1 of loan payments, measured on actual past results. Run that test before the offer, not after.
- 03
Will this deal need a quality of earnings review?
A purchase at a business price of $3 million or more needs a quality of earnings review with cash proof, on top of a valuation. Ask who orders it and who pays.
- 04
How much of my down payment can the seller or investors carry?
Seller money on full standby, standby debt and a minority investor together can cover no more than half of the required down payment. The rest has to come from sources the lender lists.
- 05
If the seller carries a note, when can it be refinanced?
Under the new rules a seller note has to be in place and current for 36 months before it can be refinanced, up from 24. Price that into the terms.
- 06
How long can the seller stay on to help?
The seller can consult for up to 24 months in total, up from 12. If the handover needs that, put it in the letter of intent.
- 07
What would make you say no on this file?
The last question is the most useful one. Ask it early, then fix what they name before you sign anything.
Where we sit.
- 01
On the buyer's side
We work for the buyer. The broker works for the seller, and the bank protects the bank.
- 02
Read the way the lender will
We test the deal on last year's numbers, the down payment rules and the quality of earnings threshold before you commit.
- 03
No fees from anyone else
No referral fees, no success fees, no payment from a lender or a broker.
Go deeper.
Before we begin
Does this page apply to my loan?
It applies to SBA applications received on or after October 1, 2026. Your lender decides which rules govern your file; ask them.
Is this financial or legal advice?
No. It is a checklist for a conversation with your lender. We are not a lender, a law firm or a CPA firm.
Want the file read before the lender reads it?
Book a free call. Bring the listing and what the lender has said so far.
Get a free callFree 30-minute call. We agree the scope and fee before any paid work. How your information is handled.