How to Use an SBA Loan to Acquire a Title & Escrow Company

Source acquisition targets through title industry brokers, roll-up platforms, or direct outreach to owner-operators in markets with active residential and commercial real estate volume. Confirm the target generates at least $500K in EBITDA, has diversified referral sources, and operates under transferable underwriter agency agreements. Request 3 years of tax returns, profit and loss statements segmented by transaction type (residential purchase, refinance, commercial), and an escrow trust account reconciliation before proceeding.

Select an SBA Preferred Lender Program (PLP) lender with demonstrated experience in financial services or professional services acquisitions — not all SBA lenders understand the underwriter agreement transfer process or how to underwrite goodwill-heavy title businesses. Provide the lender with the target's financials, your personal financial statement, resume demonstrating relevant experience, and a preliminary letter of intent. Discuss how escrow account liabilities, claims history, and underwriter dependency will be addressed in underwriting.

Work with an M&A attorney experienced in title industry transactions to structure the acquisition as an asset purchase with underwriter consent and escrow account novation, or as a stock purchase if preserving existing licenses and underwriter agreements is more efficient in your state. Include a seller note of 10–20% on full SBA standby to satisfy lender equity requirements. Negotiate an earnout tied to referral volume retention over 12–24 months to protect against key-person risk, and require the seller to remain engaged 6–12 months post-close for relationship transition.

Submit a complete SBA loan package including the executed LOI, 3 years of business tax returns, interim financials, buyer's personal tax returns and financial statement, business valuation (required for goodwill-heavy transactions), and the purchase agreement draft. Order a business appraisal from a certified valuator familiar with title agency multiples (typically 3–5.5x EBITDA). Simultaneously conduct legal due diligence on underwriter assignability, escrow account compliance, state licensing transfer requirements, and open claims history from each underwriter.

Submit formal change-of-control or assignment applications to each title insurance underwriter — including Stewart, Fidelity, Old Republic, or others — as required under the agency agreement. This process can take 30–90 days and is often the longest step in a title company acquisition. Simultaneously file for new or transferred state title agency and escrow licenses as required. Coordinate the underwriter consent timeline with your SBA lender's closing date to avoid funding delays.

Fund the SBA loan, execute the purchase agreement, and simultaneously novate escrow trust accounts to the new ownership entity with underwriter and state regulatory confirmation. Activate the seller's transition plan — introducing the buyer to top referral sources (realtors, lenders, builders) in person during the first 30–60 days. Retain all licensed escrow officers and closers with employment agreements or retention bonuses funded at close. Implement any planned technology platform upgrades (e.g., migrating to Qualia or upgrading SoftPro) in the 90–180 days post-close to avoid disrupting active transaction pipelines.