Alternatives to SBA

searcher profile

July 10, 2019

by a searcher from University of Colorado at Boulder in New York, NY, USA

I am a self-funded searcher focusing on e-commerce and SaaS companies. Many of my potential targets have looked like a good fit on the surface, but have been ineligible for SBA financing for one reason or another (located outside the US, commingled financials, etc). Has anyone had success finding financing outside the SBA program? Where should I look?

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commentor profile
Reply by an investor
from University of Pennsylvania in New York, NY, USA
My partner and I recently purchased a SaaS business and found that lending was very difficult outside of the SBA construct. At this size of deal (below say $3M of EBITDA) I found that most lenders are still very focused on asset coverage. No amount of logic (ten years of growth, no recession impact, consistent margins) seemed to change their view. I did find several cash flow lenders that were interested if they could buy a significant equity stake (20% to 25%). For me this wasn't appealing, but if you need equity anyway that may not be a barrier. Let me know if you would like some names.
commentor profile
Reply by a lender
in Yorba Linda, CA, USA
At Live Oak Bank, our Sponsor Finance team provides conventional debt for acquisitions. Minimum EBITDA is $1.75, and we go to a 40% Sr. Debt Max, up to 2.75 turns of EBITDA. If you have a deal that fits and are interested, please send me an e-mail at redacted
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