What these deals actually look like

An approval is not a deal

3,965 of the 46,696 acquisition loans approved since FY2019 were cancelled before any money moved, and another 2,119 are approved but not yet disbursed. Counting those as acquisitions would inflate every figure here by roughly a seventh. This site counts only disbursed loans, and treats the cancellations as their own finding: close to one approved acquisition in eleven collapses between the credit decision and the closing table.

The record starts in FY2019, not FY2010

The SBA did not code "change of ownership" as a category before FY2018, and FY2018 is a partial adoption year. Every 7(a) loan approved from FY2010 to FY2017 carries a business-age value that cannot distinguish an acquisition from an expansion. A chart of acquisitions running from FY2010 would show a rise from zero that is a change in a form field, not a change in the market. This site therefore begins at FY2019, the first fully coded year, and says so on every page that carries a trend.

It is the bottom of the market, and only the bottom

A 7(a) loan is capped at $5M. The median acquisition here is financed with $673,000 of bank debt, and the equity, seller paper and rollover sitting alongside it are not in the file. So this is a complete census of one financing channel, not of the whole lower middle market. Deals above roughly $10M of enterprise value are financed conventionally and appear nowhere in it.

The published multiple sets have the opposite problem. Of 10,212 announced transactions in the comparison set on our multiples page, the median deal is worth $97M and only 6.2% are under $5M. Between the two lies the part of the market almost nobody measures.

Terms here are not spread smoothly. 62.0% of loans run for exactly ten years and 17.0% for exactly twenty-five, with almost nothing in between. Two spikes that sharp are not what a market produces by negotiating, they are what a rulebook produces: those are the programme's maturity ceilings, and which applies depends on what secures the loan. So the term column doubles as a readout of what was in the deal, and it says 20.3% of these buyers took the building too.

For a seller this matters more than it looks. A buyer amortising the purchase price over ten years at 7.75% has a fixed annual debt service that sets a hard ceiling on the price they can pay, whatever they say they believe the business is worth. How the note sets the price works that arithmetic through.