By Aneil Persad, Business Broker · Published October 29, 2026
What the SBA 7(a) program is
According to the U.S. Small Business Administration, the 7(a) program is the SBA's primary business loan program. The SBA guarantees part of the loan, and the loan itself comes from a participating lender: you apply through the lender, not directly with the SBA. The SBA lists changes of ownership among the eligible uses of 7(a) funds and states a maximum 7(a) loan amount of $5 million. The SBA's Lender Match tool can connect you with participating lenders.
The SBA also lists eligibility basics: the business must be an operating, for-profit business located in the U.S., small under SBA size standards, not an ineligible type of business, and creditworthy with a reasonable ability to repay. Rates, fees, equity requirements and terms change and depend on the lender and the deal, so confirm current terms with your lender and on SBA.gov.
Buying in Canada? SBA loans apply to U.S. businesses. In Canada, the Canada Small Business Financing Program shares risk with participating financial institutions, and banks also offer conventional acquisition loans.
The steps, in order
- Get pre-qualified. Talk to one or more SBA lenders before you shop. Learn what they'll want to see from you (credit, liquidity, cash available for a down payment, relevant experience) and roughly what size of deal you can finance.
- Find a deal that fits. Look for a business whose verified cash flow can carry the debt and pay you. Sign an NDA, review the confidential information memorandum and ask early questions about earnings and add-backs.
- Sign a letter of intent (LOI). The LOI sets price, structure (asset or stock purchase), any seller note or earnout, the working capital and inventory arrangement, the transition period, exclusivity and contingencies such as financing and due diligence.
- Do due diligence. Verify the financials against tax returns and bank statements, and review customers, contracts, leases, employees, equipment, licenses and any legal or tax exposure, with your CPA and attorney.
- Lender underwriting. The lender reviews the business, you and the deal, orders any required third-party reports such as a business valuation or appraisals, and issues its approval and loan terms.
- Close. Final purchase agreement, loan documents, landlord and other third-party consents, any required licenses and insurance, and funding. Then the transition period with the seller begins.
What lenders typically look at
- The business's cash flow. Whether verified historical earnings can cover the new loan payments with room to spare, after paying a reasonable salary to whoever runs the business.
- You as the borrower. Personal credit, liquidity, the cash you are putting in and where it comes from, and management or industry experience that suggests you can run this business.
- Quality of the records. Tax returns that support the profit and loss statements, and add-backs that are documented.
- The deal structure. Purchase price relative to earnings, any seller financing, the transition plan and what assets support the loan.
- Eligibility. The business type, size and location have to meet SBA rules, which the lender checks.
Documents to prepare
About you:
- Personal tax returns for recent years and a personal financial statement
- A resume showing management or industry experience
- Proof of the funds you're investing and where they came from
- Government-issued ID and details of other businesses you own
About the business you're buying:
- Business tax returns and profit and loss statements and balance sheets for recent years, plus year-to-date figures
- The seller's add-back schedule with support
- The signed LOI and, later, the purchase agreement
- Lease, key contracts, equipment list, and licenses and permits
- A short business plan and projections showing how you'll run it
Your lender will tell you exactly what it needs. The SBA notes that application contents vary with the loan size and the lender's processing method.
Where a broker helps
- Finding opportunities: NDA-gated and off-market businesses as well as active listings, matched to your budget and experience.
- Reading the numbers: reviewing the seller's profit and loss and add-backs with you before you commit to an offer.
- Financing introductions: SBA 7(a) and conventional acquisition lenders who finance main-street deals.
- Offer structuring: asset vs. stock purchase, seller notes and earnouts, framed so the offer gets accepted and can be financed.
- Keeping diligence moving: document requests, timelines and advisors working toward a closing date.
- E-2 visa buyers: sourcing operating, transferable businesses while your immigration attorney handles the petition. Not immigration or legal advice.
Trinmakk works with buyers anywhere in the U.S. and Canada, typically on deals from $250K to $10M in enterprise value. See how buyer representation works, or the guide on how small businesses are valued.
This guide is general information, not legal, tax or financial advice. Talk to your attorney and CPA about your situation.