On Veterans Day, Lobo Business Sales LLC recognizes the service and sacrifices of America’s veterans. The leadership, discipline, strategic thinking, adaptability, and accountability developed through military service can also be valuable in business ownership, but acquiring a company calls for careful preparation and a clear understanding of the numbers.
Dave Britton, owner of Lobo Business Sales LLC, is an honorably discharged U.S. Navy veteran and a Certified Business Intermediary (CBI). The firm is veteran-owned and serves business owners and buyers across Tampa Bay.
What’s Changing With SBA 7(a) Financing?
On November 9, the U.S. Small Business Administration announced new flexibility for eligible veterans acquiring an existing business through the SBA 7(a) Loan Program. The change takes effect today, November 11, 2026, and is scheduled to remain in place through Fiscal Year 2027.
Under the policy described in the SBA announcement, buyers acquiring an existing business through 7(a) must provide an equity contribution equal to at least 10% of total project costs. That 10% requirement is not eliminated. The change concerns how eligible veteran buyers may source that contribution.
Previously, certain outside sources (including seller standby notes, investor capital, and external equity contributions) could provide no more than half of the required contribution. Under the new policy, eligible veteran buyers may be able to raise the full required amount from permitted outside sources.
This flexibility applies specifically to eligible veteran buyers acquiring existing businesses through the 7(a) program. It does not automatically apply to every veteran, borrower, business, loan, or transaction. Buyers should confirm their eligibility, permitted sources, and proposed structure directly with an SBA-approved lender. This is educational information, not lending advice. The SBA’s 7(a) program page provides general program information.
Why This Matters for Veteran Entrepreneurs
A lower reliance on personal savings for the required contribution could allow an eligible buyer to preserve more personal liquidity for the transition and early operating needs. That possibility matters because the purchase price is only one part of acquiring and running a company.
Buying an established business may also mean taking over existing customers, operating systems, equipment, supplier relationships, and employees. A going concern may generate revenue from the outset, unlike a startup that must build its operations and customer base. None of these advantages is automatic: they depend on the business, the deal, and the buyer’s ability to operate it.
An acquisition also brings financial and operational risks. Earnings may not continue as expected, key customers or employees may leave, and equipment or working capital needs may be greater than anticipated. Financing flexibility can change how a buyer funds a transaction; it cannot remove the need to examine the business carefully.
A Simple Example: What 10% Looks Like
Hypothetical example: Assume the total project costs for an acquisition are $1 million. A 10% equity contribution would be $100,000. If the $1 million figure represents only the purchase price and other project costs are added, the contribution calculation may be different.
Under the prior structure, no more than half of the $100,000-about $50,000-could typically come from permitted outside sources. The remaining amount would need to come from other sources, such as the buyer’s own funds, subject to lender requirements.
Under the new flexibility, an eligible veteran buyer may be able to source the full $100,000 from permitted outside sources. For example, a qualifying seller standby note or investor capital might be considered, but the lender must approve the source and structure.
This is not a zero-cash acquisition. Buyers may still need money for closing costs, working capital, professional fees, deposits, and reserves. Seller financing must meet applicable SBA and lender requirements, typically including a full-standby seller note, and every structure is subject to lender underwriting. This hypothetical is an illustration, not a promise or a description of a typical deal.
The Silver Tsunami and Business Ownership Opportunities
SBA Administrator Kelly Loeffler said the policy was designed to empower veteran entrepreneurs and “address the Silver Tsunami.” The SBA announcement cites its Office of Advocacy: 51% of owners of businesses with employees are age 55 or older. That figure points to a significant transition-planning question: who will carry on businesses as current owners step back?
Veteran entrepreneurs could become part of the next generation of small-business owners. In Tampa Bay, potential acquisition opportunities may arise in established service businesses, trades, manufacturing, and main-street companies across Hillsborough, Pasco, Pinellas, Hernando, and Polk counties, including Tampa, Brandon, Wesley Chapel, Clearwater, St. Petersburg, Lakeland, New Port Richey, Spring Hill, Plant City, and Lutz.
That does not mean every business will be for sale, suitable for a buyer, or financeable. It means prepared buyers can learn how to assess opportunities when they do emerge. The SBA’s figure is context, not a forecast of what any individual buyer will find.
Financing Is Only Part of the Equation
Approval for financing does not, by itself, make an acquisition sound. Buyers need to understand the business’s earnings, the price, the debt, and the demands of ownership.
Seller’s Discretionary Earnings (SDE) is a measure often used to describe the earnings available to one working owner after adjustments for that owner’s compensation and certain discretionary or one-time expenses. Those adjustments need to be examined and supported; SDE is not automatically the cash a new owner will take home.
A business’s asking price is not the same thing as its established value. Buyers should evaluate the financial records and assumptions behind the price, then consider how loan payments affect cash flow. The relevant question is not only whether the business has earnings, but whether it can service its debt and provide reasonable compensation to the new owner.
Working capital and capital expenditures matter too. A company may need cash to cover routine operations, replace equipment, or address deferred maintenance. Due diligence should examine financial records, customer and supplier relationships, employees, contracts, assets, and other risks. The buyer must also understand the management responsibilities that begin after closing.
For a focused look at cash remaining after loan payments, replacement labor, and reserves, the $39 buyer’s-guide ebook The $250,000 Cash Flow Question examines how to think beyond a business’s advertised cash flow. Buyers should also assemble an appropriate advisory team, including a lender, CPA, attorney, and experienced business broker.
❓Frequently Asked Questions
Can veterans buy a business with no money down under the new SBA rules?
No. The 10% equity contribution remains. The policy changes which permitted sources may provide that equity; buyers may still need cash for closing costs, working capital, and other expenses.
Does every veteran qualify for the new financing flexibility?
No. It applies to eligible veteran buyers acquiring existing businesses through the 7(a) program. Confirm eligibility and lender requirements with an SBA-approved lender.
Can seller financing satisfy the equity contribution requirement?
Seller standby notes are among the permitted outside sources identified in the SBA announcement. Any seller note must meet applicable SBA and lender requirements, typically full standby, and is subject to lender approval.
What types of existing businesses may qualify for SBA 7(a) acquisition financing?
The 7(a) program is used for many small-business acquisitions, but eligibility depends on the buyer, business, and lender underwriting. Confirm the specifics with an SBA-approved lender.
What should a veteran do before pursuing a business acquisition?
Learn how to assess SDE, valuation, debt service, and working capital. Assemble an advisory team, review the available information carefully, and conduct due diligence before committing to a purchase.
Your Military Experience Prepared You to Lead. Now Prepare to Own.
Military service develops leadership, discipline, adaptability, and the ability to make decisions under pressure. Those skills can provide a valuable foundation for business ownership. However, purchasing an established business requires additional knowledge, particularly when evaluating financial statements, understanding cash flow, assessing financing options, and identifying potential acquisition risks.
That’s where The LOBO Buyer Trail comes in. Developed by Dave Britton, CBI, an honorably discharged U.S. Navy veteran and experienced Florida business broker, The LOBO Buyer Trail is designed to help prospective buyers better understand the business acquisition process and approach opportunities with greater knowledge and confidence.
Before you invest in a business, invest in understanding how to buy one.
Licensed Business Broker services provided by Dave Britton, Certified Business Intermediary (CBI) Lobo Business Sales LLC Member: BBF & IBBA Supporting small businesses throughout Tampa Bay Veteran-Owned Business.
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