SBA Opens the Door for Cross-Market Expansion Acquisitions

The U.S. Small Business Administration quietly issued one of its most consequential updates of the year in Procedural Notice 5000-872764, effective September 30, 2025 - and it’s a win for business buyers and operators pursuing multi-market growth strategies.

Historically, SBA rules required that an “expansion” acquisition take place within the same geographic area as the buyer’s existing business to qualify as an expansion rather than a “new business.”

This restriction often frustrated growth-minded entrepreneurs who wanted to open or acquire locations in neighboring states but risked being reclassified as a start-up, triggering a 5% higher equity injection and stricter underwriting scrutiny.

That barrier has now been removed.

Under the revised definition in SOP 50 10 8, a company that acquires or starts another business within the same six-digit NAICS code and identical ownership, regardless of location, will be treated as an expansion rather than a new business .

This single change opens the door for a far wider range of strategic acquisitions. Entrepreneurs can now:

• Expand into new geographies while maintaining expansion status and favorable terms.
• Acquire sister companies or roll-up targets in the same industry without being penalized for crossing state lines.
• Retain the ability to leverage proven management experience and operational history, even in a new market.

In essence, the SBA has recognized what many business buyers have long known: Growth often requires stepping into adjacent markets or acquiring competitors beyond one’s backyard.

As I shared in Forbes’ coverage of the rule change, this marks a pivotal shift in how the SBA defines small business expansion.

It allows seasoned operators and first-time acquirers alike to “scale their platforms more freely, without being constrained by geography.”

For the searcher community, this means expansion roll-ups and multi-location service businesses just became significantly more financeable under SBA programs. For lenders, it means more flexibility to support experienced buyers pursuing cross-market growth.

Government Shutdown: What Business Buyers Should Know

With the federal government currently shut down, many buyers have reached out to ask how this affects SBA loan timelines. The answer depends on where you are in the financing process.

If your loan is already SBA-approved, meaning the authorization number has been issued, you are not affected.

Your lender can continue preparing your loan documents, scheduling closing, and funding as normal. The SBA’s shutdown does not halt loans that are already through the approval gate.

However, if your loan has not yet been approved, or you are just entering the SBA process, you will experience a pause until the government reopens. The reason is simple: before any SBA loan can close, your lender must “pull” an official authorization number — and that system is temporarily offline during a shutdown.

Here’s what this means in practice:

• Buyers with fully approved SBA loans can close and fund on schedule.
• Buyers in underwriting or pre-approval will need to wait until the SBA reopens for their approval to be issued.

At Pioneer Capital Advisory, we’re continuing to prepare deals for rapid execution once the shutdown ends - finalizing lender decks, gathering documentation, and structuring transactions in advance. That way, when the SBA reopens, our clients’ deals are first in line for approval and ready to close without delay.

For those under LOI or nearing a signed purchase agreement, this period can be used productively to line up financing options and ensure you’re ready to move as soon as systems come back online.

Upcoming ETA Conferences – Where to Meet Our Team

This fall, Pioneer Capital Advisory is proud to sponsor two of the premier events in the Entrepreneurship Through Acquisition (ETA) ecosystem - gatherings that consistently set the tone for thought leadership, lender collaboration, and searcher education nationwide.

​Rice University Texas ETA Conference – October 17, 2025

Held in Houston, this conference draws an outstanding mix of searchers, investors, and lenders. Expect deep dives into SBA financing trends, evolving deal structures, and firsthand insights from buyers who’ve successfully executed transactions in today’s market.

​Chicago Booth–Kellogg ETA Conference – November 19, 2025

Hosted at Navy Pier, this event is among the most influential in the ETA space. Our team will be there to discuss the expanding role of SBA and hybrid financing, recent procedural updates, and how buyers can differentiate themselves in a more selective credit environment.

If you’ll be attending either event, please stop by our booth to meet the Pioneer team. We always enjoy connecting face-to-face with current and prospective clients, investors, and partners who are passionate about building businesses through acquisition.

Firm Update – Continued Growth, Proven Results

As of this publication, Pioneer Capital Advisory has grown to a nine-person team and has closed approximately $96.35 million in SBA 7(a) loans year-to-date.

Our clients don’t just get a broker — they get a transaction partner. Each engagement includes:

• Dedicated analyst who builds a lender-ready deck and manages a competitive term sheet process.
• Head of Closing Operations who coordinates directly with lenders to prepare the closing checklist while underwriting is in motion.
• Hands-on support from our underwriting team to ensure the business story, cash flow, and structure align seamlessly with lender requirements.

It’s this integrated model - analysis, underwriting, and closing support under one roof — that continues to drive our closing success rate and client satisfaction.

Final Thoughts

The SBA’s recent procedural update isn’t just an administrative tweak - it’s a philosophical shift. For years, the agency has struggled to reconcile its local-market lending framework with the increasingly national ambitions of today’s entrepreneurs. This change signals that the SBA is adapting to reality: modern business buyers often scale across states, industries, and even borders.

When paired with disciplined underwriting and a well-prepared financing strategy, these updates create real opportunities for acquisition entrepreneurs to grow responsibly — and confidently — through the SBA platform.

If you’re exploring an acquisition or expansion under these new rules, our team at Pioneer Capital Advisory would be honored to guide you. You can learn more at pioneercap.com or reach out directly to start your pre-qualification process.

Ready to Have a Real Conversation About Business Buying?

If you're serious about acquiring a business and want to work with people who'll give you the straight truth (not social media fantasies), we'd love to connect with you.

For pre-LOI buyers ready to explore opportunities: Schedule a meet & greet call​

Already have a deal under LOI and need financing help: Schedule an LOI consultation​

Got questions or just want to chat? Drop me a line directly at matthias@pioneercap.com​

Disclaimer: The information in this newsletter is for informational purposes only and should not be considered legal or financial advice. Business buyers are encouraged to consult with their legal counsel and accountant to ensure the proper structuring of their transactions and to fully understand the tax implications of seller financing.

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