Alternative to SBA if hesitant about Personal Guarantee

by a searcher from University of North Carolina at Chapel Hill

1 year ago

I'm interested in acquiring a company with between $500k-$1M in EBITDA, which would be right in the sweet spot for a SBA 7(a) loan. I am a bit nervous about the personal guarantee though and am wondering if it is common/possible to use non-SBA financing for this size of transaction. Would a personal guarantee still be required for a non-SBA loan depending on the assets of the business? What % debt could you expect compared to the 90% max of SBA?

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searcher from University of Washington

SBIC and other private debt options are around for high quality deals and people. Not as aggressive a world right now and yes higher rates. You might check the market via Cerebro Capital. Happy to discuss.

8 months ago | like reply | 0 likes

investor from University of California, Berkeley - Haas School of Business

There are non-SBA financing options for high-quality companies (recurring revenue, consistent earnings) in the $500k-1M EBITDA range, but expect to give up most of the equity to investors and pay higher interest rates in addition to not having control. SBA will be the best option for most searchers.

1 year ago | like reply | 0 likes

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