Regalis Capital argues SBA buyers don’t need an advisor, but often should

Regalis Capital says no SBA rule requires a buy-side advisor for a business purchase, but most SBA 7(a) buyers hire one to manage broker-heavy negotiations, lender paperwork and personal-guarantee risk. The firm says buyers should also demand transparent fees before signing on.

Why it matters: - SBA 7(a) buyers often face a deal process dominated by professionals on the other side of the table. - A business buyer can end up negotiating against a seller-paid broker and a lender underwriter while also taking on a personal guarantee. - That makes representation less about rule compliance and more about risk management, speed and deal quality.

What happened: - Regalis Capital said no SBA rule requires a business buyer to hire a buy-side advisor. - The firm published a case for why many buyers still choose one anyway. - Regalis Capital said buyers deserve a clear answer before anyone tries to sell them advisory services. - The company also said the seller typically has a broker and the lender has an underwriter, while the buyer often has no professional on their side.

The details: - In most small business sales, the broker is paid by the seller from the sale price, usually on a percentage basis. - Regalis Capital said that structure means the broker does well when the price is higher and the seller's terms are better. - The buyer signing the loan often accepts a personal guarantee on a 10-year loan. - That guarantee can put personal assets behind the debt if the business fails. - Regalis Capital said first-time buyers often underestimate that exposure. - The firm said its deals typically require about 30 to 40 seller documents to get a lender to yes and 60 to 100 documents to reach closing. - Regalis Capital said a buyer handling that process alone is facing a slow, document-heavy process that can cause good deals to be lost. - "We tell people the truth on the first call," said the Regalis Capital team. "Nothing requires you to hire anyone." - The team added that buyers should not assume the process is even-handed when the seller has a broker and the lender has an underwriter. - Regalis Capital said it discloses its full fee structure in writing before any payment is made. - The firm said buyers should avoid any advisor that will not do the same. - Regalis Capital said buyers should get two fee items in writing: the upfront amount and the success fee, including what triggers it and what it is calculated on. - Regalis Capital said free guides on buying a business with an SBA 7(a) loan, questions to ask an acquisition advisor and how much cash it takes to buy a business are available at learn.regaliscapital.com.

Between the lines: - The core message is not that a buy-side advisor is mandatory. - The message is that the buyer is usually the least-protected party in an SBA acquisition process. - Regalis Capital is framing advisor value around negotiation leverage, process management and fee transparency, not just transaction completion. - The firm also appears to be using education content as a lead-generation tool for buyers who are early in the acquisition process.

What's next: - Buyers considering an SBA 7(a) acquisition are likely to keep weighing advisor fees against the cost of making mistakes in price, terms or timing. - Regalis Capital says buyers should compare advisors on disclosed fees and on what work is included before signing. - The company says it will continue offering buyer guides and acquisition-advisory services for small business purchases.

The bottom line: - No SBA rule forces a buyer to hire representation, but Regalis Capital says most buyers still benefit from having someone focused on their side of the deal.