How SBA Lenders View Addbacks (Business Acquisition)

When you go to buy a business, chances are the seller is incorporating certain owner benefits into their SDE calculations. And if you were planning on using an SBA loan to finance this acquisition you’re gonna need to know how SBA lenders view these add backs.
In this video I’m going to show you how SBA underwriters view these addbacks, and whether they will be considered in the loan calculations.
Bonus: towards the end of this video I’m going to go through some real life examples of addbacks from CIMs that have recently come across my desk and share with you how SBA lenders would view them.

[@luiguiditroit3417]

Great content.! on my way to our first acquisition.

[@SBA_Ray]

Very cool! Thanks for watching

Hi Ray, great information. Im not sure is this is the same thing as an add back, but how about when applying for an SBA 7a loan, how is the owner's payroll treated when determining cash flow?. i.e Most of my cash flow is on my payroll, in order to pay business expenses that are on my personal credit cards.

[@SBA_Ray]

No further analysis needed. It all works itself out in the global cashflow analysis. Global includes business and personal.

@@SBA_Ray Thank you for getting back to me Ray, I actually tried getting in touch with you a few weeks back at your office, and I believe I spoke to your receptionist or assistant. I am soon ready to seek an SBA loan, however, I believe because I am in California, someone in my family must be a member of your Credit Union?, in order to offer me services in California? Can you please confirm this, because if this is not correct, I can use your SBA services, or maybe you can recommend someone out here in California, L.A , Orange County area??, Thanks again. Your expertise and information provided in your videos are golden, and appreciated.

[@SBA_Ray]

We lend nationwide. We would open up a five dollar savings account prior to close.

@@SBA_Ray Excellent, I am hoping to be ready later this year. I will circle back to your office, any special phone extension or person to speak to? I know I had to do a bit of investigating to find you last time, Cheers!

[@SBA_Ray]

You can email me at [e-mail]

[@theapprovedguy]

Thanks Ray, I’m going to give you a call tomorrow.

[@SBA_Ray]

Sounds good!

[@EverythingAJs]

Do you work and represent in all states for SBA?

[@SBA_Ray]

The company I work for lends in all 50 states

[@ADreamCatcha]

Hi! Can you explain what “Auto Expense (portion from rent)” means? 😅

[@SBA_Ray]

If the seller is deducting their personal automobile or personal rent expense on their tax returns, this is considered an addback.

[@isaiahnguyen-vazquez5547]

How do you view rental addbacks on a refinance?

[@SBA_Ray]

I’m not seeing why refinancing impact your rent expense. Can you explain?