Compare SBA 7(a), an SBA-plus-seller-note blend, and conventional financing for your family business transfer. See loan amounts, monthly payments, and total interest side by side.
Use the independent third-party valuation, not the family agreement price. SBA requires fair-market value per SOP 50 10 7.1.
SBA 7(a) minimum is 10%. Seller carry can count toward this in blend structures.
Seller has held the business long enough for long-term capital gains rates to apply. This often increases seller willingness to carry a subordinated note, since an installment sale spreads taxable income across years.
Most SBA-eligible industries qualify for 7(a) acquisition financing with standard documentation.
Rate: 10.5% variable (Prime + 2.75%)
Term: 10 years
Requires fair-market-value pricing, qualified third-party valuation, and an SBA-approved lender. SBA guarantee fee (~2.77% on guaranteed portion) added to closing costs.
Rate: 10.5% SBA + 5.5% seller note (IRS AFR)
Term: 10 yr SBA + 5 yr seller note
Seller must agree to carry a subordinated note on full standby (no payments) for the first 2 years per SBA rules. Lowest cash required from buyer. Seller note rate tied to IRS Applicable Federal Rate.
Conventional acquisition lenders typically require 20–25% down. Your current 10% cash down is below that threshold. SBA 7(a) is the more accessible path at this equity level — the SBA guarantee gives lenders comfort that conventional underwriting does not.
Rates as of early 2026. SBA 7(a) rates are variable (Prime + spread). IRS AFR mid-term used for seller note estimate. Verify current rates at sba.gov and irs.gov/applicable-federal-rates.
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Outputs are estimates based on your inputs and published program parameters. Actual lender terms vary. Disclaimer
How we built this. SBA 7(a) parameters reference SBA Standard Operating Procedures (SOP 50 10 7.1) and published rate caps. Seller note rates use IRS Applicable Federal Rates (AFR) for mid-term obligations as published at irs.gov/applicable-federal-rates. Conventional parameters are based on published acquisition loan terms from three national lenders as of early 2026.
Related guides: SBA loans for buying a business from a parent · Seller financing for family transfers · SBA vs. conventional for family sales