Seven paths to understand, the questions that matter, and an explicit boundary between education and lender underwriting.
Eligible ownership changes, working capital and other permitted uses. The maximum individual loan is $5 million; lender underwriting and current requirements still control.
Ask: repayment source, buyer eligibility, applicable SOP/notice, equity, guarantees, valuation and seller-note treatment.
Official program ↗Long-term financing for eligible fixed assets. It is not a general replacement for acquisition goodwill or working capital.
Ask a CDC how real estate/equipment uses are allocated and whether the transaction fits.
Official program ↗A separate underwriting path based on the lender, borrower, business, collateral and deal structure.
Compare all-in costs, covenants, guarantees, amortization and refinance risk.
Seller retains repayment risk through a note; price, lien priority, payment schedule and remedies matter.
Never assume a standby note qualifies as buyer equity. Obtain written lender/legal approval.
Capital can reduce scheduled debt service, but changes ownership, governance and eventual proceeds.
Define control, dilution, return preferences, distributions and decision rights with counsel.
Some sellers retain an interest. Headline price and cash received are not identical.
Model post-close governance, continued employment, dilution, liquidity and tax treatment.
Match financing to assets with financeable collateral and usable repayment support.
Do not use asset value as a substitute for cash-flow durability or liquidity.
Prepare the transaction structure and sources/uses, historical financials with periods and accounting basis, support for adjustments, a downside case, buyer operating experience, ownership/IP/contracts, working-capital needs, lease and property facts, and the seller’s proposed note or rollover. Record what remains missing before the LOI hardens around an unsupported price.
Terms are educational; this site does not originate loans, certify eligibility or recommend a financing product for your personal circumstances.