When most people think of SBA 7(a) business acquisition loans, they imagine tech companies, restaurants, or franchise deals. But one of our most recent closings proves that with the right strategy, even highly localized service businesses can secure major funding to expand and thrive.
We recently closed an $825,000 SBA 7(a) business acquisition loan for a husband-and-wife team purchasing a water treatment and filtration business in Jupiter Farms, Florida. The community of over 4,000 homes relies heavily on private well water, making this service essential for day-to-day living. And with no plans for city water to replace that need, this acquisition positions the buyers as an indispensable local provider.
A Business With Deep Roots—and Deeper Potential
The company had been operated by the same owner since 2005 and only recently hired its first employee in 2021. With a strong reputation and minimal competition, the foundation was solid. The buyers plan to grow the service side of the business significantly, generating more recurring revenue while maintaining the trust of the Jupiter Farms community.
This loan demonstrates that SBA lending isn’t just for high-growth startups. With the right experience, plan, and lender, even a niche, community-rooted company can qualify for funding.
Strategic Solutions for a Collateral-Light Deal
The buyers didn’t own real estate or other significant collateral. However, they did bring:
– Relevant industry experience, including the husband’s previous role selling to water filtration companies.
– Strong personal credit.
– A dual-income household, with the wife continuing her career as a lawyer, bolstering overall household liquidity.
These factors, combined with a smart business plan, made the deal fundable—despite limited hard assets.
What Nearly Derailed the Deal? Vehicle Title Transfers
This loan also came with a tight timeline, made tighter by the transfer of commercial vehicles attached to the business. If you’re buying a business that includes company vehicles, title transfers can cause serious closing delays if you don’t plan ahead. Here’s what you need to know:
How to Prepare for Vehicle Title Transfers in SBA Business Acquisitions
Transferring vehicle titles during a business acquisition, especially when an SBA loan is involved, requires careful attention to detail and adherence to specific guidelines.
1. Due Diligence and Verification
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- Verify Vehicle Information: Double-check VINs across the title, bill of sale, and the actual vehicle.
- Check for Liens: Ensure titles are clear of liens or obtain a signed lien release from the lender.
- Get a Vehicle History Report: This helps uncover any hidden issues like salvage history.
- Calculate Title Transfer Fees: Make sure to request these be added into your closing costs. If you don’t, you may be required to pay them out of pocket or dip into working capital you may have requested in your loan – leaving you lean and vulnerable.
2. Accurate Documentation
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- Complete Title Forms Correctly: No blank spaces. All names, dates, and sale prices must be accurate.
- Use the Right Forms (e.g., TX Form 130-U): States have specific forms required for title transfers.
- Provide Supporting Docs: A bill of sale, odometer statement, power of attorney (if applicable), and SBA collateral documents may all be necessary.
3. Communication and Coordination
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- Coordinate with Your Lender: Ask early about their title requirements.
- Bring Professional Support: It’s absolutely necessary to hire a qualified advisor or attorney to help manage the process.
4. Timely Submission
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- Meet All Deadlines: Late paperwork can trigger penalties or cause closing delays.
- Notify the DMV: Sellers must report the sale within 30 days to avoid future liability.
5. Understand Potential Challenges
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- Transfer Restrictions: After closing the acquisition loan, SBA approval is required for all future ownership changes involving vehicles tied to the loan.
Lessons from This Closing
- Collateral isn’t always the key to SBA funding. A thoughtful structure, experience, and cash flow coverage matter just as much—if not more.
- Vehicle transfers can become a bottleneck. Always build in extra time for title processing in your closing timeline.
- Don’t forget to consider Title Transfer Fees. Request these be added into your closing costs ahead of time, before you end up losing a chunk of your working capital.
- Dual-income households help mitigate risk. When one spouse keeps a job, it strengthens the loan profile.
Ready to see what’s possible for your next business acquisition? Whether you’re buying a specialized local service business or something bigger, our team structures SBA loans that work for real-world scenarios.
Contact us at info@comcapfl.com or call (888) 959-1648 to talk strategy. To get started now, apply through our Loan Finder App—no document uploads, no obligations. Just real answers and real funding.
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