For a 7(a) change of ownership (a stock purchase, redemption, or purchase of substantially all assets with continuing operations; otherwise underwritten as a start-up), the Lender ensures the transaction promotes or preserves the small business, which is Borrower or Co-Borrower (never a loan to an individual alone); enters the Business Purchase Price (excluding appraised owner-occupied real estate) and the transaction type in the SBA Loan System; limits total acquisition debt (including seller debt not on full standby) to the business valuation and to what debt service coverage supports; verifies the seller's data against IRS transcripts; allows no seller earnouts (buyer rebates go to reduce the loan principal; working capital true-ups do not); and ensures the seller in an Initial Acquisition or Business Expansion leaves every officer, director, stockholder and employee role (a consulting contract of up to 24 months is allowed). Its file holds all purchase agreements with schedules and amendments, its review of all other debt and equity investors' terms, a documented site visit to the Applicant and the target (or the documented basis for alternative verification of a virtual business), a compliant real estate appraisal where property is bought, and evidence that all conveyed assets, including transferable licences, are secured as collateral.
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.