Transaction work is quoted as a fixed fee once the structure and the document set are known, usually at the end of the first call, and the quote is given in writing before the engagement begins.

SBA Funding Counsel
Across Every SBA Program

Q: We already signed a letter of intent. Is it too late?

No. A letter of intent is ordinarily non-binding as to the economics, which means the structure described in it can usually still be corrected. The sooner it is reviewed the smaller that correction is, because the terms have not yet been built into a credit memorandum.

Q: The lender has its own closing attorney. Why do I need my own?

The lender's counsel represents the lender. That attorney documents the loan and confirms the SBA's conditions are satisfied. It is not that attorney's job to negotiate your purchase agreement, your non-compete, your guaranty or the lease between your entities.

Karina A. Vasquez, Esq.

Georgetown Law · Admitted in Florida, North Carolina and D.C. Bilingual
You work with Karina directly. No associates, no paralegal hand-off.

The SBA is not a single loan. It is 7(a), 504, Express and the small working capital products, franchise and multi-unit lending, and rural lending under the USDA guaranty, and each program carries its own eligibility conditions, occupancy rules and closing file. A structure that is routine under one of them is ineligible under another, and that question gets decided by the documents long before a lender reads them.

The firm handles the legal side of SBA transactions from the letter of intent through the closing table. Business acquisitions, partner buyouts, owner-user real estate, expansion and working capital, franchise purchases, construction and refinance, drafted against the program the file is actually going into and closed alongside the lender's counsel.

See the Document Set Book a 15-Minute Call

Georgetown LawFlorida · North Carolina · D.C.English & Español

Where SBA Files Lose Their Closing Date

A credit-approved SBA file rarely falls apart on the credit. It falls apart because a document signed months earlier cannot be made to comply with a rule nobody read it against.

The letter of intent is where the structure of the deal is actually decided. By the time a term sheet is issued, the purchase form, the seller note and the source of the equity injection have already been described to the lender and built into the credit memorandum. Changing any one of them afterward sends the file back through credit, and a file that goes back through credit in month four frequently does not come out in month five.

The documents that cause this are ordinary. A purchase agreement drafted as an asset sale when the reason to buy the company was its S election. A seller note signed at the letter of intent stage with a subordination clause instead of the SBA's standby language. An operating agreement that does not say who can sign for the buyer. None of these are difficult to get right at the start, and all of them are expensive to fix at the end.

This firm is engaged at the letter of intent rather than at closing. The purchase documents are drafted against the current SOP and against the lender's own closing requirements from the beginning, so the file that arrives at the closing table is the file the lender's counsel already expected to receive.

What a document written against the wrong rule costs in time

Purchase agreement drafted as an asset saleTarget is an S corporation and the election was part of the value

4 to 8 weeks

Seller note signed without a standby agreementNote has to be renegotiated and re-executed on the SBA form

2 to 5 weeks

Equity injection cannot be traced to its sourceStatements, gift letters and transfers reconstructed after the fact

2 to 4 weeks

Corporate records do not show authority to signMinute book rebuilt and consents signed before the closing can proceed

1 to 3 weeks

A deal credit-approved in forty daysIllustrative only, and not a prediction for any particular transaction

Month Five

Ranges reflect common delays in SBA change-of-ownership closings generally. They describe the market and are not statements about any particular lender, transaction or outcome.

The Programs These Transactions Close Under

Each program carries its own eligibility conditions, and those conditions decide what the purchase documents have to say. The firm drafts to the program the deal is actually going into rather than to a general form.

Up to $5 million

SBA 7(a)

Business acquisition, partner buyout, expansion, working capital, equipment and real estate purchase in a single facility. The most flexible of the SBA products and the one most acquisitions close under.

$5M debenture, $5.5M manufacturing

SBA 504

Owner-occupied commercial real estate and long-life equipment, structured as a conventional bank first mortgage behind a CDC second. Longer terms and a fixed rate on the debenture, with no cap on total project size.

$350K to $5 million

Business Acquisition

Buying an operating company, buying out a partner, or acquiring a competitor. Goodwill is financeable, and real estate and working capital can be folded into the same facility rather than carried as a second loan.

$350K to $5 million

Owner-User Real Estate

Purchase, refinance or construction of the building the business occupies, at long amortization with no balloon. The operating company has to occupy 51 percent of an existing building or 60 percent of new construction.

$25K to $350K

Express and Small Working Capital

Working capital, inventory, staffing and marketing on the Express track, with a mid-tier product that adds full 7(a) uses including debt refinance and a business purchase at Express speed.

504 refinance

Debt Refinance Without Expansion

Existing qualified debt refinanced under the 504 program to 90 percent of fair market value, with eligible business expenses included. The program cannot be used to put cash in an owner's pocket.

$100K to $20 million

Multi-Unit Franchise

Acquisition, new build and territory expansion for franchise operators. The franchise agreement is read for the control provisions that create affiliation, because the lender now makes that determination itself.

$50K and up

401(k) Rollover (ROBS)

Retirement funds used to capitalize a purchase without an early withdrawal penalty. The structure requires a C corporation and a qualified plan that buys its stock, and it has to be built correctly at formation.

Rural properties

USDA Business and Industry

The USDA guaranty for businesses outside urbanized areas, reaching sizes and terms the SBA programs do not. Eligibility turns on the property's location rather than on the industry.

Program parameters are set by the lender and by the current SBA Standard Operating Procedure, and they change. Financing placement is a separate business activity carried on through Forman Capital Partners, where Karina Vasquez is a partner and general counsel. The work described on this page is legal work performed by the law firm.

A Partner at Forman Capital Partners, Leading Its SBA Practice

Karina Vasquez sits on both sides of the same transaction. She is a partner and general counsel at Forman Capital Partners, a nationwide commercial capital advisory firm, where she leads the SBA practice.

That role puts her in the file long before it reaches a closing table. She sets the direction on how an SBA transaction is structured and taken to market, works the deal through underwriting with the lender, and sees what credit committees actually condition, which lenders hold delegated authority and move quickly, which ones have quietly closed a vertical this quarter, and what a submission has to contain on the first pass rather than the fourth.

Most of that information is not published anywhere. It is held by the people who close with those lenders repeatedly, and it decides more about a timeline than any provision of the Standard Operating Procedure does.

The documents get drafted against both sets of requirements at once. The SOP decides what is eligible. The individual lender decides what actually gets approved. Having both in view when the purchase agreement is written is the reason a file comes back with two conditions attached to it instead of nine.

She Leads the SBA Desk

Direction on structure, lender selection and execution across the firm's SBA transactions nationwide, from acquisitions and partner buyouts to owner-user real estate and franchise programs.

She Knows Where the File Is Going

Delegated authority, industry appetite, hold size and whether a lender closes in house are what decide a timeline. Those answers come from having closed with the lender before.

She Writes the Paper That Has to Survive It

The purchase agreement, the standby note, the entity documents and the leases are drafted knowing exactly which desk is going to read them and what that desk will condition.

One Attorney Through Closing

The same attorney who structures the deal negotiates the documents and sits at the closing. There is no hand-off to an associate at the point where the file gets difficult.

Forman Capital Partners is a separate business from the law firm and capital placement is not the practice of law. Financing is arranged there under its own agreement, and legal representation is engaged separately in writing with KVasquez Law. A client is free to use either one without the other.

A File That Could Not Be Financed As It Arrived

A buyer came to the firm on the purchase of a Midwest transportation and warehousing company. The file as it stood was not close to financeable, and the buyer had been told it was ready to submit.

The earnings in the operating statements did not reconcile to the filed tax returns a lender would receive alongside them. The equity injection had no identified source. The acquisition was structured through a holding company, which would have terminated the target's S election at closing and taken part of the reason to buy the business with it. And the company was in transportation, a sector most SBA desks had quietly stopped taking after four years of freight recession.

Karina took the file apart and told the buyer exactly what it needed, item by item, rather than sending it out and waiting to be declined. The earnings were rebuilt on a documented add-back schedule so the trailing number could be defended line by line against the returns. Partners were brought into the acquisition so that the injection existed, was sourced and was traceable, with a portion of the seller's paper placed on full standby for the life of the loan. The purchase was restructured so the buyers acquire as individuals, which is what keeps the S election alive through the closing. Coverage was presented on trailing earnings, with the growth plan carried separately as upside the credit does not depend on.

Rebuilt that way, the file was placed with a lender whose book is concentrated in hospitality rather than transportation. A deal that had been written off on its industry got read on its own numbers, which is the entire objective of structuring a file before it goes out rather than after it comes back.

This matter is described generally and without identifying information. Every transaction is different, and prior results do not guarantee or predict a similar outcome in any other matter.

As the file arrived

Operating statements that did not reconcile to the filed tax returns
No identified or traceable source for the equity injection
A holding-company structure that would have ended the target's S election at closing
Seller paper drafted as ordinary subordinated financing
Coverage presented on projections rather than on trailing earnings
An industry most SBA desks had closed to

As it went to the lender

A documented add-back schedule supporting the trailing earnings line by line
Partners brought into the acquisition, with the injection sourced and traceable
Buyers acquiring as individuals, so the S election survives the closing
A portion of the seller note on full standby for the life of the loan
Credit presented on trailing earnings, growth carried separately as upside
Placed with a lender who read the company rather than the sector

The Document Set

Every item below is drafted or reviewed by the firm. The lists are what an SBA closing file actually contains, which is usually more than a buyer is told at the letter of intent stage.

Transaction documents

Letter of intent drafted so the structure survives credit review
Stock purchase agreement or asset purchase agreement, chosen on the tax and eligibility consequences rather than by habit
Purchase price allocation and the Section 1060 schedule the parties will both have to file
Seller note executed with the SBA standby agreement at the same closing
Bill of sale, assignment and assumption agreements
Non-competition and non-solicitation covenants from the seller
Consulting or transition services agreement within the permitted post-closing period
Escrow agreement, holdback terms and closing escrow instructions
Corporate resolutions and written consents authorizing the sale on both sides

Lender and SBA file

Eligibility, affiliation and ownership review against the current SOP before anything is drafted
Formation of the buying entity and its operating or shareholder agreement
Equity injection documentation, source of funds letters and the trail the lender has to verify
Unlimited personal guaranty review and spousal consent where ownership and collateral require it
Lease assignment, estoppel certificate and the landlord's waiver and access agreement
UCC, tax lien and judgment searches, payoff letters and termination statements
License, permit, franchise and material contract assignment consents
Life insurance collateral assignment on the principals
Closing binder and the post-closing corporate record the next lender or buyer will ask for

The Rules That Decide the Structure

These are the provisions that most often change a deal after it is signed. Each of them is a drafting decision at the letter of intent and a renegotiation at the closing table.

The Equity Injection

A change of ownership requires an injection measured against total project cost rather than purchase price, so fees and financed working capital count. At least half has to be the buyer's own unborrowed money, which is why the source of funds trail matters as much as the amount.

Standby, Not Subordination

A seller note counts toward the injection only on full standby for the life of the SBA loan, meaning no principal and no interest paid in the interim, documented on the SBA's own standby agreement and signed by the creditor. A note that says it is subordinate does not qualify.

Ownership Eligibility

Eligibility now turns on a citizenship test applied to every direct and indirect owner, and the standard was tightened in 2025 and again in 2026. A single owner who does not qualify makes the borrower ineligible, so this is confirmed before anything else is drafted.

Complete Change of Ownership

Where the seller exits entirely, the exit has to be real. No shares, no officer or director seat, no employment, and no compensation dressed as something else. A transition role is possible as an independent consultant at a stated rate within the permitted period.

Valuation Discipline

An independent business valuation is required above the SOP threshold and whenever buyer and seller are related. Where the valuation comes in below the agreed price, the gap is closed with equity, with fully standby paper, or with a price reduction, and not by adding seller financing.

The S Election

Where the target is an S corporation, the buyer's structure decides whether the election survives the closing. An acquisition entity sitting above the target can terminate it, and the loan documents will not undo that. This is settled before the purchase agreement is drafted.

Guaranties and Collateral

Owners at or above the threshold guarantee the loan without limit, a spouse may be asked to sign depending on ownership and on what secures the loan, and the lender takes a lien on substantially all business assets. Each of these has terms worth reading before signature.

Owner Occupancy

A real estate loan requires the operating company to occupy 51 percent of an existing building or 60 percent of new construction, with a plan to occupy more over time. The lease between the holding entity and the operating company has to be written to those terms.

Franchise Affiliation

The SBA no longer maintains a franchise directory, so the lender determines eligibility from the franchise agreement itself. The provisions that matter are the ones giving the franchisor control over employment, suppliers and the sale of the unit.

The SBA Standard Operating Procedure is amended regularly and several of these requirements changed in 2025 and again in 2026. Every provision above is confirmed against the version in effect on the date your loan is numbered, which is the version that governs your file.

From Letter of Intent to Closing

Structure Call

A fifteen-minute call at no charge, covering what is being bought, who is buying it, where the injection comes from and what the seller expects to keep. If the deal has an eligibility problem, it surfaces here rather than in month three.

Letter of Intent

The letter of intent is drafted or revised so that the purchase form, the seller note and the injection are already compliant when the lender reads them. The economics stay the client's decision.

Documents and Diligence

Purchase agreement, entity documents, leases and the corporate record are drafted and the diligence responses are organized against the lender's checklist. Lien and title issues are cleared while credit is still working.

Closing

Closing is coordinated with the lender's counsel, the CDC on a 504 transaction, and the title or escrow agent. The client receives a closing binder and a corporate record that is complete, which is what the next lender or buyer will ask to see.

Frequently Asked Questions

We already signed a letter of intent. Is it too late?

No, and this is the most common place a file arrives. A letter of intent is ordinarily non-binding as to the economics, which means the structure described in it can usually still be corrected. The sooner it is reviewed the smaller that correction is, because the terms have not yet been built into a credit memorandum.

The lender has its own closing attorney. Why do I need my own?

The lender's counsel represents the lender. That attorney's job is to document the loan and confirm the SBA's conditions are satisfied, and it is not to negotiate your purchase agreement, your non-compete, your guaranty, or the lease between your entities. Those documents are yours and they outlast the loan.

Should the deal be a stock purchase or an asset purchase?

It depends on what makes the business worth buying. Licenses, contracts, a favorable lease and a tax election usually argue for buying the entity. Unknown liabilities and a step up in the tax basis of the assets argue for buying the assets. The SBA adds its own constraint, because a partial change of ownership has to be a purchase of equity rather than of assets. This is decided before the purchase agreement is drafted and not after.

The seller wants to stay on and keep a small piece. Can that work?

Those are two different questions. A seller may remain as an independent consultant for a limited period at a stated rate, which is how most transitions are handled. A seller keeping equity turns the deal into a partial change of ownership, which carries its own form and guaranty requirements and has to be structured that way from the beginning.

Can the seller note cover the down payment?

Partly. A seller note can satisfy a portion of the required injection, and only if it is placed on full standby for the life of the SBA loan on the agency's own form. The remainder has to be the buyer's own unborrowed funds, documented back to their source. A note drafted as ordinary subordinated seller financing will not be credited.

The valuation came in under the purchase price. What now?

The gap is closed with additional equity, with paper placed on full standby, or by reducing the price. It is not closed by adding seller financing on ordinary terms, and a structure that attempts it will not survive the lender's review.

Do you represent sellers as well as buyers?

Yes. A seller carrying standby paper is lending a meaningful amount of the purchase price on terms that pay nothing for years, and the documents deserve the same attention from that side of the table.

What does this cost?

Transaction work is quoted as a fixed fee once the structure and the document set are known, which is usually at the end of the first call. The quote is given in writing before the engagement begins, so that legal cost is a known number in your sources and uses rather than an estimate.

The Structure Call

The call covers what is being bought, how the purchase is structured, where the equity injection is coming from, and what the seller expects after closing. Where there is an eligibility problem, the firm says so on the call rather than after an engagement letter is signed.

Bring the letter of intent if one exists, and the lender's term sheet or checklist if the file is already in process.

(305) 359-7522

1200 Brickell Avenue, Suite 1950, Miami, Florida 33131
By appointment only legal@kvasquezlaw.com

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IMPORTANT DISCLOSURES: KVasquez Law is a Florida professional limited liability company providing legal services in Florida, North Carolina, and the District of Columbia. Karina Vasquez, Esq. is admitted to practice in those jurisdictions. The information on this website is for general informational purposes only and does not constitute legal advice. No attorney-client relationship is formed by visiting this website, submitting a contact form, or sending an email. An attorney-client relationship is established only upon a written engagement agreement signed by both the firm and the client. Past results do not guarantee future outcomes. The firm is by appointment only. Karina Vasquez's affiliations with Forman Capital Partners (Partner), an unnamed private equity firm (General Counsel), and Avanti Way Realty (licensed REALTOR®) are separate business activities and are independent from her practice of law. For full disclosures, see Disclosures. © 2026 KVasquez Law.

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Attorney Advertising. Karina A. Vasquez, Esq., Florida Bar No. 1025744, is responsible for this website. KVasquez Law is the trade name of KVasquez Law, PLLC, 1200 Brickell Avenue, Suite 1950, Miami, Florida 33131. By appointment only. No attorney-client relationship is formed by using this site, submitting a form, booking a call or sending a text or email. Past results do not guarantee a similar outcome.

Karina A. Vasquez, Esq. is admitted to practice in Florida, North Carolina and the District of Columbia. Federal tax matters are handled nationwide before the Internal Revenue Service. Remote and virtual representation is available to clients across Florida, North Carolina and Washington, D.C.

The information on this website is provided for general informational purposes only and does not constitute legal advice. Viewing this website, submitting a form, or contacting KVasquez Law does not create an attorney-client relationship. An attorney-client relationship is formed only upon execution of a written engagement agreement. Do not send confidential information until such an agreement is in place. Prior results do not guarantee a similar outcome.