ADVICE REGARDING A MINORITY STAKE ACQUISITION

Hi,

I would appreciate lenders and deal makers alike chiming in on this. We have an opportunity to buy 45% of a company (LLC corporate structure) which is intended to buy out one partner. That partner is wanting to maintain a small piece of equity (~3%). We are in initial talks so no LOI has been signed, but we have it on good authority that the EBITDA is at least over $2M (I've seen where this is a line in the sand for many larger and more diversified lenders).

Can anyone help me on what kind of loan we would be able to pursue here? I feel that the SBA 7(a) is out of the question because the previous owner will be staying on as a silent equity owner. Does SBA have a "partner buy out" type loan? The business has little physical assets, so we would need a cashflow loan in nature.

As far as the legal/corporate structure goes, will we need to form a new entity? Or can we just buy 45% of the current LLC?



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