Oh the SBA changed the SOP? Cool.

Kirstin Vinal emailed me back in December about buying the law firm where she worked. Pretty straightforward stuff, or so I thought. She knew the business inside and out, had a good relationship with the owner, and seemed like exactly the kind of person who should be running her own shop. This was a perfect deal to operate under the SBA rules at the time, where Kirstin could make the purchase without a down payment.

What I didn't know was that we were about to get thrown one hell of a curveball.

Kirstin had worked at Tuttle Law and Associates for years, and was basically running the place. Once I realized how great of a fit it was going to be for SBA financing, I was excited to get started. It was a bit before I heard back, but she ultimately responded and said "We don't want to close until 2028. We need to get some things in order." I was a bit bummed, but put a note in our SBA loan CRM to follow up in the fall of 2027.

Then March hits and out of nowhere I got a message. They were actually ready to make the transition happen, like.. yesterday. Now with regulatory changes coming down the pipe for the SBA SOP, we had to move quickly. After June 1, 2025 the same down payment rules weren't going to apply. Not the end of the world, but wouldn't you rather buy a business with $0 down payment than 5% or 10%?

Unfortunately, things just weren't moving as quickly as they needed to. There was some missing information from the current owner's side that we had to nail down before we could make anything happen fast.

But here's the thing about Kirstin — she wasn't just identifying problems, she was already fixing them. By the time we really got into the weeds of this deal, she'd already cleaned house. A couple bad employees were gone. Remaining staff were in their right places. She'd even gotten her finance team to go back and audit some files to find where some expenses were going.

I mean, who does that before they even own the place?

The owner, Chris, seemed pretty reasonable about the whole thing. He'd been planning to retire in a couple years anyway, and Kirstin was the obvious choice to take over. But he wanted out now.

Then May rolled around, and that's when things got interesting. I got a call from our lending partner. He and his credit team were pushing Kirstin's deal to their full credit committee way ahead of schedule. This wasn't normal — these guys usually take their time with everything. But they had a reason.

New SBA rules were kicking in June 1st. If we didn't get final approval before then, Kirstin would need to come up with a lot more money out of pocket. And I mean a lot more.

The good news was that the lender really liked Kirstin. After their call, he told us, "This is the person I think this works. I want to do this deal." But the Q1 numbers weren't great — all those transition costs and operational fixes had hurt profitability in the short term. So they weren't comfortable trying to rush this through before the rule change, and wanted to try and fit it into the new rule book.

So we got creative.

What if Chris didn't completely walk away? What if he kept 1% ownership and guaranteed the loan for a couple years? It would give the lenders comfort while still letting Kirstin run the show. What if the SBA SOP 50 10 8 rule book actually works?

I wasn't sure how either of them would feel about it. Chris might not want to stay tied to the business, and Kirstin might not want to share ownership, even just 1%.

But when I brought it up with Kirstin, she got it immediately. "I think he could be open to it if it makes it work," she said. And she was right. Chris's response when she ran it by him was basically, "Yeah, that's kind of what I figured we'd end up doing anyway."

The credit committee meeting happened on May 7th, and by that afternoon, we had our answer. Deal approved. Instead of putting in gobs more in equity, Kirstin's total investment stayed manageable. We structured it with SBA financing and seller financing, and set closing for June 30th.

Looking back, what made this work wasn't the loan structure or even the creative 1% solution. It was relationships. Kirstin had spent months proving herself to Chris and earning his trust. She'd already demonstrated to the lenders that she could identify and fix operational problems. When things got tough, everyone was willing to get creative because they believed in her.

The firm is now in Kirstin's control, and all those operational improvements she made are paying off. The expensive client errors are gone. The contract labor costs are under control. Quality is up, waste is down.

And in a couple years, when that guarantee period is up, Kirstin can refinance everything and buy out Chris's 1% if she wants to. Clean slate, full ownership, and a law firm that's running the way she always knew it could.

Sometimes the best deals are the ones where everyone has to get a little creative to make it work.