On October 1, the SBA’s new rulebook takes effect. It changes how much cash a buyer needs, where that cash is allowed to come from, and what a business has to prove before a bank will lend against it.
A deal that gets financed on September 30 might not get financed on October 1. Same business, same price, same buyer.
In our August update, Sam Scharich, Calder Capital’s Buy-Side Managing Director, sits down with Matthias Smith of Pioneer Capital Advisory to break down what’s actually changing and what it means for the size of deal you should be targeting.
Watch the update below. Have questions? We’ve answered the top buy-side FAQs here.
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Key Takeaways
The SBA’s updated rulebook, SOP 50 10 8.1, takes effect October 1, 2026 and applies to any loan that receives an SBA loan number on or after that date. The changes that matter most to buyers:
- The down payment stays at 10%, but at least half must now be the buyer’s own unborrowed cash. For first-time acquisitions, that 10% cannot be reduced or waived and at least 5% must equity provided directly by the buyer.
- Seller notes on standby and outside investors compete for the same allowance. Together they can fund no more than half the required injection, so buyers need to choose before the LOI is signed.
- Passive investors under 20% may receive only tax distributions until the loan is retired, which can run a decade. That changes who is willing to invest in an acquisition.
- Debt service coverage rises to 1.25x for first-time acquisitions, measured on historical earnings rather than projections. Deals that only work on a growth story will be harder to finance.
- Quality of earnings reports are required at $3 million and above, ordered by the lender, and the earnings figure they produce governs the loan. If it comes in below the agreed price, the buyer covers the difference.
The practical takeaway for buyers: know how much cash you can actually put into a deal, and be realistic about what size business that supports.
Provided for general informational purposes only. Not lending, legal, tax, or investment advice. Consult your lender and advisors regarding your specific transaction.
Check out our clients who have been featured on the Acquiring Minds podcast:
We have 2 searchers who recently closed deals with the Calder Capital Buy-Side team that have been featured on the Acquiring Minds podcast, hosted by Will Smith. Click the images below to listen to their stories and learn more.
Have a question you’d like answered?
Thanks for watching our August 2026 Buy-Side Update! Looking to buy a business? Email our Buy-Side Managing Director, Sam Scharich, at [email protected] with any questions, and he will do his best to answer them in next month’s update.
Check out answers to frequently asked questions about Calder’s Buy-Side Services here.
Why work with Calder?
Calder serves as a Buy-Side M&A advisor and provides acquisition search services to serious buyers with clearly defined acquisition criteria. Calder does all of the heavy lifting: researching prospects, qualifying prospects, verifying ownership, confirming phone numbers and emails, reaching out directly multiple times solely on behalf of our client, and setting up a drip campaign so that your prospects are periodically and professionally contacted. Additionally, as requested, Calder will conduct business valuations, write LOIs, negotiate on behalf of our client, coordinate due diligence, and quarterback all steps to a successful closing.
Calder works with clients on a guaranteed basis, so if we don’t deliver, our clients don’t pay. Check out some of our current clients here.
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