Every financing structure is paid back by the business’s cash flow. Start with a business that can carry the deal, then build the structure.
Go deeper
- Financing a business acquisition
- SBA loan to buy a business
- Seller financing
- Earnouts
- Equity partners
- Buy a business with little money
Talk it through
Buying or selling in South Carolina? Talk to Ben about acquisitions. Ben is a buyer, not a lender or advisor — he’ll share how he thinks about structure and point you to the right professionals. For his broader work with owners, visit benlovro.com.
Straight answers
What's the most common way to finance a small business acquisition?
A combination of an SBA 7(a) or bank loan, buyer equity and often a seller note. See financing a business acquisition.
How much equity do I need for an SBA acquisition loan?
SBA rules set a minimum equity injection for acquisitions, and lenders may require more. Confirm current requirements with a lender. See SBA loan to buy a business.
Can a seller note count toward my down payment?
Under SBA rules, only if it’s on full standby for the life of the SBA loan, and only for part of the required injection. See seller financing.
What is an earnout?
Part of the price paid later only if agreed targets are hit. See earnouts.
Should I bring in investors?
Investors can fill capital gaps in exchange for ownership and some control. See equity partners.
Can I use retirement funds to buy a business?
Some buyers use specialized structures, but they carry personal risk and compliance complexity. Get qualified tax and legal advice first.
Will I have to personally back the loan?
Lenders typically require owners of a significant share of the borrower to personally back acquisition loans. Read every document with your attorney.
What should a seller ask about a buyer's financing?
How the purchase is funded, who has pre-qualified the buyer, how much of the buyer’s own capital is going in, whether a seller note is required, and the expected timeline to approval.