100% SBA Financing

Your tax/accounting firm makes $100k revenue. You buy a $700k firm with 100% financing. There’s an SBA product for that. (Full Disclosure: I am in the tax/accounting industry, so I am talking to those also in the industry. I'm sure the methods below work in other industries, but tax/accounting is my industry of expertise.) It’s called the Expansion Loan, a little-known path inside the SBA 7(a) program for acquisitions. Here’s how it works: 1. You already need to own a firm. 2. The firm you’re buying has to match your NAICS code. 3. Your ownership percentage has to stay the same before and after. 4. It must be within "reasonable geographic distance" to "actively manage the daily operations". (If it's not within about 2 hours of you, you will most likely have to make a case.) Check those boxes, and the SBA doesn’t require an equity injection. After that, it’s up to the bank. Some want to see 2 years of firm ownership. Some care about the size of your current firm compared to the one you’re acquiring. Others will stretch if the deal makes sense. For context, I worked with a client doing about $100k at her firm. She acquired a $700k CPA practice using the expansion loan and got 100% SBA financing. A 7:1 ratio. This is not a formula, but a data point that shows what’s possible. The truth is getting 100% financing is only half the battle. The other half is making sure the firm you’re buying is actually a good deal. Because the wrong acquisition with the right loan is still a bad move.