True, but the SBA will only guarantee no more than 75% of a loan of $150,000 or more 85% if less than $150,000 but that's the maximum leaving the lender on the hook for the rest. Furthermore the interest rate can be as high as 2.75% above the base rate. Plus a loan processing fee along with annual service fee. While it can be a solution from the contractor's perspective as well as the lender it's anything but a sure bet. Coming back to the guy who bought my route his father was all too happy that I would finance the entire purchase because of his belief that the SBA would not guarantee a high percentage of the loan leaving a higher exposure than he wanted his bank to take on.
I believe it is over $500,000 in "good will" assets they will only loan up to 75%. Under half a million and they will go up to 85%. Lengthy process but they will loan on these routes and if you have good cash flow they will loan and appraise for top dollar. Ex ended up pissing me off pretty bad a few months back that I decided to sell.
I still believe it is a very profitable, huge growth play if you are in the right area but like I said for a while the times of 10-20+ year contractors is dead. It is too bad, if they ran things a little differently it would yield much longer contractor runs but it is what it is.
Just like all of us say here if you don't like it get out. I got tired of it so that is what happened. We can sell out whenever we want. I have no hard feelings towards Ex and wish all remaining contractors luck going forward.