An SBA-backed acquisition still begins with lender underwriting of a specific borrower, business, structure, and set of documents. A pre-LOI calculation can expose price and cash-flow assumptions, but it cannot turn the deal into an approved loan or substitute for the lender's current checklist.
Can 7(a) proceeds fund an ownership change?
The SBA's 7(a) page lists complete or partial changes of ownership among permitted uses. It also lists operating-for-profit, U.S. location, size, eligible business type, creditworthiness, and reasonable ability to repay among the general conditions. The borrower applies through a participating lender, which identifies the documents needed for the specific transaction.
Which policy source is current?
SBA publishes lending policy in SOP 50 10 and labels versions by effective date. Version 8 is the applicable source in August 2026, while version 8.1 is posted with an October 1, 2026 effective date. A memo should cite the version in force on the date it is prepared rather than copy an old equity-injection rule from a blog.
What can the coverage card do before an LOI?
It can state a proposed equity amount, loan balance, rate, amortization, owner-pay assumption, and cash flow, then show the resulting annual debt service and coverage at three prices. It cannot state lender approval, set value, or recommend an offer. The lender and buyer's professional team handle the actual structure and application.
What can the Reality Contact check provide?
The free card calculates coverage at the asking price, 10% under, and 20% under with every loan assumption printed. The $149 CIM first look identifies claims, omissions, stated add-backs, coverage, and ten broker questions. The $495 pre-LOI brief adds the tax-return and P&L tie-out, deeper add-back reconstruction, concentration and owner-dependence read, working-capital estimate, and thirty questions. The buyer sends every question.
Where does the operator boundary sit?
This is not financial advice. Reality Contact, LLC writes an analysis memo from buyer-supplied documents. It is not a quality-of-earnings report, audit, assurance engagement, valuation, or opinion. Reality Contact is not a CPA firm or broker, takes no closing-linked fee, contacts no seller, broker, or lender, and gives no recommendation. The coverage card is a real calculation on printed assumptions. Reality Contact is sampling whether buyers want the deeper document read. We reply by email with the ask, 10% under, and 20% under cases so the arithmetic can be rerun. The current source check starts with this published record.