Price vs. Terms: 7 Structures That Get Deals Closed in 2025 (Georgia Edition)

SBA policy updates effective June 1, 2025 reshaped what lenders will approve, especially on seller notes and equity injection. If you want your Georgia deal to close, structure now drives outcomes as much as headline price. Small Business Administration+1

Below are the 7 structures we’re seeing consistently get signed LOIs across the line in 2025—plus Georgia-specific tax and legal nuances to keep you safe.

1) SBA 7(a) + Seller Standby Note (counts toward equity)

When to use: You want maximum leverage and need help meeting the 10% equity requirement.

How it works (2025 rules):

• Minimum 10% equity injection for complete changes of ownership.

• A seller note can cover up to 50% of that equity (i.e., 5% of project cost) only if it’s on full standby for the entire SBA loan term (no principal or interest payments during the term; interest may accrue). Starfield & Smith Attorneys at LawWhiteford LawWindsor Advantage

Why lenders approve it: It keeps cash in the business and conforms to the new SOP 50 10 8 guardrails. Small Business Administration

Watch-outs: The “life-of-loan” standby is a hard pill for many sellers—set expectations early in Georgia negotiations. Whiteford Law

2) SBA 7(a) + Subordinated Seller Note (non-equity)

When to use: Buyer can meet the full 10% cash equity; seller still wants carry.

How it works: Seller carries a subordinated note documented via SBA Form 155 Standby Creditor’s Agreement, which subordinates the seller’s rights and restricts action against collateral without lender consent. Whether payments can start earlier than “life-of-loan” depends on lender policy and the standby language. No payments are permitted if the SBA note is in default. Small Business AdministrationStarfield & Smith Attorneys at Law

Why lenders approve it: Extra cushion without compromising first-lien cash flow.
Watch-outs: Spell out payment deferrals and default blockers in the standby agreement and seller note. Starfield & Smith Attorneys at Law

3) Split the Deal: 7(a) for goodwill + 504 for real estate

When to use: The business includes owned real estate and you need to lift DSCR.

How it works: Finance FF&E/intangibles with 7(a); finance owner-occupied real estate with 504 (typical 50% bank / 40% CDC / 10% borrower structure). 504 cannot finance goodwill; that stays on the 7(a). This split often lowers blended payments and improves coverage. Small Business Administration

Why lenders approve it: 504’s long fixed-rate piece makes DSCR easier and frees up 7(a) capacity for working capital.

4) Working-Capital Peg & Closing Adjustments (price vs. terms trade)

When to use: The gap is confidence in quality of cash flow, not the multiple.

How it works: Agree a normalized working-capital peg (e.g., NWC at average of trailing months). Use true-ups for A/R, A/P, inventory counts and specific escrows for known risks (e.g., tax, litigation). You can also use a short-term escrow/holdback for indemnities or undisputed adjustments without creating an SBA-prohibited earn-out. (Performance-contingent **earn-outs are generally not allowed in SBA-financed deals—see Structure #6.) SBA 7(a) Loans

Why lenders approve it: Price becomes fixed and determinable at closing while still protecting both sides.

5) Georgia SSBCI “Gap” Capital to finish the stack

When to use: Bank is close but needs risk-sharing to clear underwriting.

How it works: Georgia’s State Small Business Credit Initiative (SSBCI 2.0) offers Loan Participation and Credit Guarantee programs delivered through banks/CDFIs. These can fund a subordinate slice or participate in senior debt—often just enough to pass DSCR and collateral tests. Georgia Department of Community Affairs+1

Why lenders approve it: State participation/guarantee reduces their exposure and speeds credit committee paths—especially for owner-occupied Georgia businesses. Georgia Department of Community Affairs

6) No-Earnout Compliance Structure (SBA-friendly alternatives)

When to use: Seller wants upside; SBA rules say no.

Key rule: Earn-outs are not permitted in SBA 7(a) acquisitions—the purchase price must be fixed at closing. If you need post-close mechanics, use retention/bonus or consulting agreements (for services actually provided), or narrow escrows that are not tied to future performance. SBA 7(a) LoansClearly Acquired

Partial buyouts note: If the seller keeps equity under 50 10 8, they must personally guarantee the SBA loan for at least two years—a major negotiation point. Whiteford Law

7 Real-Estate Leaseback + Georgia Intangible Recording Tax planning

When to use: Seller owns the building; buyer prefers lower upfront price/less debt.

How it works: Seller keeps the real estate and signs a market lease to the buyer. This lowers acquisition price and 7(a) debt—often the cleanest way to meet DSCR. If you do need a Georgia mortgage, note the Intangible Recording Tax: $1.50 per $500 of recorded debt (capped), but as of July 1, 2025 loans with terms ≤62 months are exempt (previously ≤36 months) —a lever to reduce closing costs when structuring a short initial term with renewals. Department of RevenueTroutman Pepper Locke

Price vs. Terms Matrix (what actually moves the needle)

A quick DSCR sanity check (what lenders look for)

DSCR = NOI (or EBITDA) ÷ total annual debt service. Many lenders look for ≥1.15–1.25x depending on the program. If NOI is $360k and total annual debt service across SBA + seller note is $288k, DSCR = 1.25x—usually clears the bar. NerdWallet

Georgia-specific deal tips (don’t skip these)

• Non-competes are enforceable for sellers if reasonable; Georgia courts routinely uphold sale-of-business restrictions and may blue-pencil scope/duration (three-year periods are often viewed as reasonable).

• Sales & use tax on asset deals: Tangible personal property may be taxable unless an exemption applies (e.g., resale with ST-5). Coordinate filings to avoid successor-liability surprises. Department of Revenue

• No “bulk sale” statute: Georgia repealed Article 6; you won’t file a formal bulk-sale notice, but still get tax clearances and payoff letters to avoid inherited liabilities. CSC Global Blog

Put it together: three Georgia-ready playbooks

1. The “Tight DSCR” Close

   • 7(a) + seller standby note (5% toward equity) + 504 for real estate + NWC peg + small tax escrow.

   • Rationale: Lowers payment, fixes price, clears equity rules. Starfield & Smith Attorneys at LawSmall Business Administration

2. The “Equity-Light” Close

   • 10% cash equity + subordinated seller note on lender-approved standby + GA SSBCI participation to trim senior exposure.

   • Rationale: Meets 10% rule, preserves cash, improves committee optics. Georgia Department of Community Affairs

3. The “Real-Estate-Heavy” Close

   • Sell business only; seller keeps building under market lease. If a mortgage is needed, consider ≤62-month initial term to avoid Georgia intangible tax.

   • Rationale: Biggest DSCR lift + lower closing tax. Troutman Pepper LockeDepartment of Revenue

FAQ (fast)

Are earn-outs possible with SBA financing?
No—SBA requires a fixed, determinable purchase price at closing; earn-outs aren’t eligible. Use escrows/consulting instead. SBA 7(a) Loans

Can the seller keep equity?
Yes in some partial buyouts, but under 50 10 8 the seller must personally guarantee the SBA loan for at least two years—many sellers decline. Whiteford Law

What DSCR do lenders want?
Often ≥1.15–1.25x, depending on lender and program. Bankrate

Sources you can rely on (selected)

• SBA SOP 50 10 8 and official notice (effective June 1, 2025). Small Business Administration+1

• Seller-note & equity: Starfield & Smith; Whiteford; Windsor Advantage. Starfield & Smith Attorneys at LawWhiteford LawWindsor Advantage

• Earn-outs not allowed (SBA 7(a) acquisitions). SBA 7(a) LoansClearly Acquired

• 504 structure basics. Small Business Administration

• Georgia Intangible Recording Tax & 2025 law change. Department of RevenueTroutman Pepper Locke

• Georgia non-compete enforceability (sale of business). Ogletree

• Georgia SSBCI programs (Loan Participation / Guarantees). Georgia Department of Community Affairs+1

Expert summary (for the busy seller/buyer)

In 2025, terms close Georgia deals: life-of-loan standby if you want the seller note to count as equity; no earn-outs under SBA; split real estate to 504; use SSBCI when banks are tight; and structure leases/escrows to fix price, lift DSCR, and cut Georgia closing tax friction. Get these right and your “price” becomes financeable. Starfield & Smith Attorneys at LawSBA 7(a) LoansSmall Business AdministrationGeorgia Department of Community AffairsTroutman Pepper Locke

Want this tailored to your deal?
Send me the TTM P&L, balance sheet, rent roll (if any), and your target purchase price. I’ll map the lowest-friction structure against today’s SBA/SSBCI rules and Georgia taxes so you can negotiate price and terms with confidence.