SBA Tip # 2

No such thing as a 1.2 million dollar goodwill cap on loans.

By Stephen Mariani


There truly is no such thing as a goodwill maximum, as defined by SBA, and this is ALWAYS an individual lender policy. It is for this reason alone that we choose to share the actual written SBA rule below. These days, as the economy recovers, we see more and lenders again joining the march to help small businesses and approving goodwill type loans all across the country. The biggest misconception out there these days that we hear almost weekly is that no goodwill loan can be written over 1.2 million. We, at Diamond, believe that the impression given by many conservative lenders is that no lender willing to go over 1.2 in goodwill. Nothing can be further from the truth. Although it may be difficult to secure a 5 million dollar completely unsecured loan these days, it is NOT against any rule. We often secure approvals over 1.2 and have gotten them as high as 2.8 million. Granted, the deal has to be strong but they are getting done and probably much more than you might think.

 7a Maximum loan amounts

General Rule is gross loan amount limited to $5,000,000 per loan.

SBA guaranty amount limited to $3,750,000 to one borrower (and any affiliates)

Why you need to know this

These days with all the misinformation being circulated around, Diamond Financial wants you to know what is really going on within the SBA lending markets. We feel it is important that you understand the options you have and the best methods to secure the financing you need to close more deals for more and higher commissions. Our focus is and will always be to assist brokers around the country to successfully close more transactions.